Insurance Policies Every Church Should Have (But Many Don’t)

If I had a nickel for every time I’ve heard, “We’re covered, right?” in a church board meeting, I could probably buy that new youth center you’ve been dreaming about.

It’s usually said with confidence — sometimes even pride — as if “having insurance” is a single box you check and never think about again.

But here’s the thing: not all coverage is created equal, and “covered” can mean a dozen different things depending on the fine print. I’ve seen churches with three-ring binders full of policies… only to discover that the one type of coverage they actually needed wasn’t there at all.

Let’s walk through the insurance policies every church should have. Not the “nice to have” stuff. Not the “maybe next budget cycle” items. The essentials. The policies that keep your ministry from going under when life throws the kind of curveball you hope never happens.

Why Churches Often Miss Critical Coverage

Before we dig into the list, let’s talk about why this happens. Because most churches aren’t neglecting coverage on purpose.

Here’s what I see most often:

• Insurance language is basically a foreign language. Unless you moonlight as an attorney or an underwriter, half the policy might as well be written in hieroglyphics.
• Agents don’t always understand churches. They might be great at insuring restaurants or retail shops, but a church has its own unique set of risks.
• Budgets are tight. If something has to give, leaders trim coverage they don’t think they’ll need. Unfortunately, that’s often the thing they will need.
• Policies get old. I’ve seen churches still using the same policy they bought when the sanctuary still had orange carpet. A lot changes in 10, 20, or 30 years — your coverage should too.

The result? Many churches are walking around with a false sense of security.

The Non-Negotiables (In Plain English)

These are the “must-haves” — and not just in name, but in proper amounts with no nasty exclusions hiding in the back pages.

1. General Liability Insurance

Think of this as your foundation. It’s the policy that steps in when someone says, “I was hurt on church property, and it’s your fault.”

That could be:

• A visitor slipping on wet tile in the lobby.
• A child falling during a church picnic.
• A volunteer accidentally damaging a neighboring property during an outreach event.

Without general liability, even small claims can drain your benevolence fund before you’ve had a chance to say “amen.”

Pro tip: Don’t assume this covers everything. It’s the start, not the finish line.

2. Sexual Misconduct / Abuse and Molestation Coverage

I’m putting this one high on the list because it’s the coverage too many churches think they have — but don’t.

General liability almost never covers abuse claims. You need a dedicated section in your policy spelling this out. And it needs to have real limits — $25,000 or $50,000 won’t cut it when legal defense alone can cost double that.

If your church runs a nursery, Sunday school, youth group, or any program for vulnerable adults, this is not optional.

I once heard about a church that skipped this coverage because “we know our people.” A single incident — just an allegation — cost them hundreds of thousands of dollars. Their programs never fully recovered.

3. Property Insurance

This is the one most people know, but here’s the catch — it’s easy to be underinsured.

Property insurance covers your buildings, furniture, sound equipment, office tech, even the coffee makers in the fellowship hall. But if you’ve made improvements, added AV systems, or expanded facilities, your old coverage limits might not come close to replacement costs today.

And if you rent your space? You still need property coverage for your stuff. If the building owner’s policy doesn’t cover your church’s equipment, you’ll be on the hook.

4. Workers’ Compensation

Here’s where I see eyebrows raise in boardrooms. “Do we really need that? We’re a church.”

Yes. In many states, it’s legally required. It covers medical bills and lost wages if an employee is injured while working. In some states, volunteers are included too — a surprise to many leaders until someone gets hurt and asks, “Am I covered?”

Imagine your custodian falls off a ladder replacing sanctuary lights. Without workers’ comp, the costs are coming straight out of church funds.

5. Directors and Officers (D&O) Liability

This one’s not as well-known, but it’s just as important. D&O covers your leadership team — pastors, elders, board members — against claims related to the decisions they make.

Think of it as protection against lawsuits saying, “You made a bad decision, and it cost me.”

Without D&O, leaders can be held personally responsible. I’ve seen this coverage save leaders from having to sell personal assets to pay legal fees.

6. Employment Practices Liability (EPLI)

Covers claims of wrongful termination, discrimination, or harassment.

Even in the most loving church, employment disputes happen. And in today’s legal climate, defending against these claims is expensive — even if you win. EPLI ensures you can defend your church without draining your budget.

7. Cyber Liability Insurance

If your church collects online donations, stores member data, or even just uses a mass email system, you’re vulnerable to a data breach.

Cyber coverage helps with:

• Investigation costs
• Legal fees
• Notification requirements
• Credit monitoring for affected people

One phishing email is all it takes for a hacker to get into your system. Without coverage, the cleanup costs land squarely on you.

The “Optional” Policies That Aren’t Really Optional

Sometimes coverage gets labeled “optional” simply because the law doesn’t require it. But for a church, optional doesn’t mean unnecessary.

• Business Auto: If the church owns or regularly rents vehicles, this is essential.
• Event Insurance: Large conferences, concerts, or community events often carry unique risks.
• Flood or Earthquake Insurance: If your church is in a risk zone, this isn’t just nice-to-have — it’s survival coverage.

When CLS conducts a Comprehensive Church Insurance Review, these are the gaps we look for. Sometimes they’re the ones that end up making the difference between “we got through it” and “we had to close.”

How CLS Helps Churches Get It Right

At Church Law & Strategy, we know pastors and board members don’t wake up excited to read policy fine print. That’s our job.

We:

• Read every page of your current coverage.
• Flag dangerous exclusions.
• Recommend changes to match your actual ministry risks.

Higher-tier clients, like those in The Pastor Support Plan or The Executive Plan, get full insurance review and reporting included. Smaller churches can still access it as a standalone project — because every church deserves the peace of mind that comes with knowing they’re truly covered.

Bottom Line

Insurance will never be the most exciting item on your budget. But it is the one that can keep your ministry alive when the worst happens.

If you don’t know exactly what policies you have — and what they really cover — take the time this month to find out. The policies you skip today might be the ones you desperately need tomorrow.

Our Links

• Church Legal Audit and Recommended Action Report
• Comprehensive Church Insurance Review and Report
• Child Safety Certification Program

Other Resources to Check Out!

• Brotherhood Mutual – Church Insurance Basics
• GuideOne – Specialized Insurance for Churches
• Insurance Information Institute – Risk Management for Organizations

Disclaimer: This blog post is for informational purposes only and does not constitute legal advice. Reading this content does not create an attorney-client relationship between you and Church Law and Strategy or its representatives. For specific legal advice tailored to your church or organization, please consult a licensed attorney.