By Brian Lindquist
The modern insurance landscape is much different than it was even five years ago. Record losses, inflation, high construction costs, and more have all contributed to rising insurance costs. This industry-wide trend has many ministries asking questions about how to maximize the value of their insurance.
There are many factors that drive the overall cost of insurance, and losses play a main role. Generally, more losses lead to a higher cost of insurance for everyone.
Several insurance insiders from Brotherhood Mutual share their insights on how to manage risk and get the most from your insurance. They’ve intensely studied what successful ministries do to protect themselves.
“Insurance is intended to be protection for a large financial loss that an organization couldn’t otherwise survive,” said Joel Colglazier, assistant vice president of underwriting at Brotherhood Mutual. In other words, it’s designed to make you whole again after loss.
TOP TIPS FOR MAXIMIZING THE VALUE OF YOUR INSURANCE
Controlling Cost
To understand how you can control the cost of your insurance policy, you need to understand how your insurance policy is rated. Insurance companies look at your campus and facilities, and your geographic location to determine the types of losses that are more likely for your area, such as fire, coastal storms, hail, and others. They’ll also look at the types of losses that are probable for the types of activities you’re engaged in. Finally, insurance companies will look at how your past losses might help to predict your future losses.
When it’s time to renew your policy, or if you switch insurance companies, one of the things they look at is how many times a ministry has submitted a claim. Frequently submitting claims, even when they seem small, adds up. And frequent claims can increase the cost of your insurance because you’re at greater risk of having a larger claim in the future.
This is where the concept of risk management comes into play. “Insurance is one piece of a larger risk management puzzle,” noted Colglazier. In addition to having insurance, taking proactive steps to avoid claims altogether is an important step that helps ministries in the long run. “One of the most important risk management steps is to think of your insurance company and agent as a partnership,” said Colglazier. Collaboratively working together to strengthen your resiliency is central to Brotherhood Mutual’s mission of advancing the Kingdom by serving the Church.
Insurance helps protect the future of your ministry’s people and property. While it’s crucial to have the right insurance, it’s also important to take proactive steps to reduce or prevent losses from happening altogether. Not only does this reduce the chance you’ll have out of pocket expenses, but it can help control the cost of your insurance.
Managing Risk
Managing risk helps ministries steward their resources and maximizes the value of insurance. “It’s a two-part process,” offered Andy Hayton, a regional manager with Brotherhood Mutual. “First, it involves looking at what you can do now to prevent claims from happening in the first place. Second, if you have had a claim, it’s looking at what you can do to prevent it from happening again.” For example, as you implement policies and procedures or if you add something to your property to improve safety, document that and let your agent know. “This is helpful, especially when you make improvements after a claim event,” said Hayton.
Protecting Against Property Risk
Property risks are those that affect your buildings, equipment, vehicles, and other assets. These include fire, water damage, theft, vandalism, wind, hail, lightning, and others. Property risks can result in costly repairs or replacements, as well as disruptions to your ministry activities. So it’s good to think ahead when it comes to managing risk on your property.
“The bottom line is that ministries need to be proactive and control the controllable. Routinely walk around your campus to identify hazards before they become a problem. Make repairs quickly while they are small and more affordable,” noted Colglazier. “Ministries need to have a plan and budget for the things that can improve safety and resilience.”
Managing Liability Risks
Liability risks are those that affect your legal responsibility for the safety and well-being of others. These include injuries, accidents, lawsuits, allegations, and other claims that can arise from your ministry activities. Liability risks can result in costly settlements, judgments, medical bills, legal fees, and reputational damage.
“I recommend that ministries keep good records,” said Ron Troyer, a senior manager in casualty claims for Brotherhood Mutual. This includes everything from financial decisions to board meeting minutes, volunteer position descriptions, and documenting slips, trips, and falls. Also, it’s important to follow your ministry’s written guidelines. If you don’t have guidelines, start developing them right away.
And when the potential for a lawsuit arises, for example, someone threatens to sue, Troyer’s advice is to report it. “We’ll investigate and see if there are things that we can do to help you prevent an issue from becoming a lawsuit. If you try to handle it yourself and someone ends up suing you, it may become much more complicated.”
The risk management tips on the following page are some of the most critical actions that healthy, successful ministries take when managing their risks and reducing or preventing loss. See how many of these steps your ministry currently has in place.
Property Protection Tips
- Keep your building well maintained and updated. A well-kept building shows that you care about your ministry and your risk management.
- Make sure your fire sprinkler system is centrally monitored by a professional service. Keep up on annual and five-year inspections as well as maintenance of your sprinkler system.
- Install a flow-based automatic water shut-off device. This can prevent major water damage and mold growth, which are both some of the most costly and disruptive types of claims for ministries. Plus, it can potentially lower your deductible for freeze claims.
- Have your electrical panels inspected by a licensed electrician at least annually.
- Replace your roof when it reaches its life expectancy. This is important for all roof types, although certain roof surfaces are more prone to wind and hail damage.
- Install a lightning protection system that safely redirects lightning strikes away from your building.
- Have your boiler inspected by a qualified technician at least once a year. Your insurance company will likely arrange for this inspection at no cost to the ministry.
- Maintain your HVAC units and protect them from copper theft by installing cages or fencing around them.
- Install a burglar alarm system that’s also centrally monitored.
- Make sure rainwater drains far away from your building’s foundation.
- Utilize smart technology to monitor conditions in your facilities on a mobile device. This allows quick action to be taken when there’s a potential issue, even if no one is on site.
Liability Prevention Tips
- Have written child protection policies and procedures that outline how you screen, train, and supervise your staff and volunteers who work with children and youth. Conduct comprehensive background checks on all of them and keep records of your screenings.
- Have an employee handbook that’s been reviewed by an attorney and covers your policies on hiring, firing, discipline, harassment, discrimination, and other employment issues. Make sure your employees read and sign the handbook and that it’s updated regularly.
- Use waivers or release forms for any activities that involve physical risks, such as sports, camping, or field trips. Obtain signed facility use agreements and certificates of liability insurance from outside groups using your facilities.
- Slip/trip/fall claims are often the most common. Have someone periodically walk through your campus and note anything that could cause someone to slip or trip. Start in the parking lot and work your way through your building. Keep a record of who checked it, when, if they noticed anything, and what was done to fix any issues.
- Avoid dangerous games or stunts that can cause injuries or lawsuits. Avoid taking dangerous risks on roofs or ladders.
- Have written policies and procedures for your safety and security measures.
- When running camps, retreats, or mission activities, make sure you have experienced and qualified people leading them. Follow the most current practices and standards for the type of activity and have written policies and procedures, as well.
- Review your website and social media accounts to make sure they reflect your ministry accurately and positively. Avoid posting anything that could be construed as misleading, needlessly offensive, or inappropriate.
- When you use vehicles for your ministry, make sure your drivers are experienced, licensed, and insured. Follow the age and mileage requirements for your insurance and protect your vehicles from theft or damage.
- Keep your parking lot well-lit and free of cracks, potholes, and other trip hazards.
Getting the Most from Insurance
While every ministry is unique and should work with its insurance agent for specific guidance, there are two additional things ministries can do now to maximize the value of their insurance.
First, consider taking a higher deductible, which means you share in more of the risk of a claim. This can lower your premium while encouraging a more proactive approach to repairing damage instead of making an insurance claim. “Think about how much you’d be able to pay if your property was damaged. Take that maximum number and make that your deductible. You can then take the money you save on your premium and put it toward capital improvement,” offered Jason Petty, an insurance agent with Lightwell Insurance Advisors.
Another way to maximize your insurance is to work with your agent to take a fresh look at your coverage options. For example, having property and liability coverage, commercial auto, workers’ comp, and payroll all with one company can be beneficial for ministries looking to maximize their dollars. Brotherhood Mutual provides all these products so ministries can get access to specialized service and protection from a company that shares your heart for ministry.
Work with your agent to look at whether it makes sense to move some coverages off your main church policy, especially for claims that can’t be avoided. “This is known as unbundling, and it can be a way to protect your main insurance policy from claims that tend to have a higher frequency or severity, like med pay or wind/hail damage,” noted Hayton.
The Benefits of Working with a Ministry Insurance Specialist
One of the best steps you can take to protect your ministry and save on insurance costs is by working proactively with your agent and insurance company that specialize in ministry insurance. “They have the experience and expertise to help ministries prioritize their risk management efforts,” noted Hayton. “The good thing is that ministries insured by Brotherhood Mutual are already working with ministry specialists.”
Since every ministry’s needs are unique, working with a ministry specialist can help you develop a plan quickly, and you’ll have access to the resources that can help you implement your plan. Plus, they’ll be able to advise you on which risk management activities can help with preventing loss and providing potential premium credits.
Now is a Good Time to Start
Risk management is a complex topic, but it’s one you don’t have to navigate alone. The many risk management concepts you’ll read about in this issue of Resilient Ministry all work together to help protect and defend ministries from loss.
You have access to the knowledge and resources to help you succeed. Talk with your agent to get a good understanding of where your initial focus should be. We all share a heart to help you take incremental steps in making your ministry more resilient.
Top Tips from Insurance Agents
Be selective with minor property claims. “If there’s a question, get an estimate on the repair cost, then determine if it’s worth submitting to insurance,” said Jeff Miller, agent and managing partner with Lightwell™.
Use Legal AssistSM, a free service provided by Brotherhood Mutual. You can get complimentary risk management guidance about ministry-related legal issues.
When considering new activities or new ministries, talk to your agent if there’s any element of risk. Why? “Your agent will understand your policy and can help you navigate what’s covered and what isn’t,” mentioned Miller. Additionally, there may be hidden risks your agent can identify that should weigh into the decision about the activities or ministries being considered.
Keep track of any updates you do to your building. “Let your agent know if you replace your roof, update HVAC, improve electrical, install flow-based automatic water shutoff valves, and others,” said Jason Petty, an insurance agent with Lightwell Insurance Advisors.
Use My Account. You’ll get timely notifications and can set up automatic payments, so you never miss a payment. “Late or missed payments can be a sign that a ministry isn’t caring for its property,” noted Petty.
Carefully consider whether you want to submit small claims, even if they have a low deductible. “Broken windows and theft typically have much lower deductibles, but it’s not always in your best interest to file that type of claim,” explained Petty.
Appoint one or two people to handle submitting claims to insurance. “I was meeting with a church leader recently and he had no idea that they had a claim the previous year,” offered Petty.
Avoid $0 property claims. This is a claim that’s submitted but insurance doesn’t pay. “While there may be a good reason, it can appear as if a ministry simply decided to not fix the damage,” said Petty.
If your building is damaged and you’re working with a contractor for a quote, make sure you’re the one communicating directly with insurance. “This puts you in the driver’s seat when making decisions about whether you want to file a claim or pay for the repair yourself,” noted Petty.
Ask a Specialist Contact our risk control specialists today. Get answers to questions about safety, facility maintenance, employee training, and more. You also can request an on-site risk assessment. Phone: 866-231-0363 Email: riskcontrol@brotherhoodmutual.com
Brian Lindquist is a risk management writer for Brotherhood Mutual Insurance Company. He works closely with the company’s risk control, underwriting, claims and legal staff, and with outside experts to research ways Christian ministries can take action to reduce loss or to avoid a claim altogether.
More details are also available in this publication for churches from Brotherhood Mutual:
