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Risk Management and Insurance |
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This chapter includes a discussion
of the types of insurance churches and middle governing bodies
should secure; leading companies that offer insurance; and, recommended
minimum standards. Various helpful checklists appear at the end
of the chapter. |
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Suggestions for Accounting Procedures to Reduce Susceptibility
to Loss |
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- All operations should be audited by qualified individual
annually.
- All checks over $250 should require two countersignatures.
- All bank accounts should be reconciled by an individual
who is not authorized to make deposits or withdrawals from
those accounts.
- New employees should complete and sign employment applications
with releases for reference and background checks.
- All securities should have joint control of two or more
individuals.
Also see the minimum financial procedures set out at G-10.0401
in the Book of Order. These standards are detailed in the
Employee or Volunteer Dishonesty section, above.
If an embezzlement is suspected or discovered, the insurance
company and presbytery should be notified immediately. They
can provide access to accountants and attorneys. |
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Suggestions
for Property Lease Procedures to Reduce Loss |
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- The tenant should sign a lease spelling out the rights
and liabilities of the parties. As part of that lease, there
should be an indemnification and a hold harmless agreement
in favor of the church. The church should carefully draft
the lease in conjunction with its legal counsel so that the
church’s requirements and needs become lease obligations
of the tenant.
- As part of its duties under the lease, the tenant should
be required, prior to occupancy, to submit a current certificate
of insurance from the tenant's liability insurer naming the
church as an additional insured under that policy. If the
lease is a multi-year agreement, a new certificate should
be submitted each year. The certificate of insurance should
show general liability and property coverage. It should also
show property insurance for the tenant's contents. If the
tenant is conducting a business such as a day care, the certificate
should show workers' compensation insurance for their employees.
A copy of all insurance certificates should be sent to the
church's insurance agent for review.
- There should be an inquiry made in writing to the church's
current insurance company to make sure coverage is provided
for any liability resulting from the proposed rental. Also
check with your insurance agent for possible increases in
premium or for possible exclusions that may apply. Any increase
that is incurred may be offset by adjusting the terms of the
lease or requiring the tenant to pay for the increase. The
church also may wish to review the adequacy of its own insurance
policy limits in light of any new activity. If supplemental
or specialized coverages are needed, they should be obtained
prior to lease execution and property occupancy. Ask the insurance
agent to send you a binder or endorsement showing coverage
is in effect for the new occupancy. The lease should not be
signed until you receive written confirmation from your agent.
If any insurance claim or lawsuit should arise, give immediate
written notice to your agent and the insurance company.
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Federal
Bus Regulations |
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Churches that use buses or vans
to transport passengers across state lines may be subject to federal
safety regulations for motor coaches and buses (effective January
1, 1995). The new regulations apply to any interstate transportation
of "business private motor carriers of passengers" and
"nonbusiness private motor carriers of passengers" as
these terms are defined by the Federal Highway Administration
(FHWA) of the Department of Transportation (DOT). The FHWA has
stated that churches in general either will be exempt from the
federal regulations altogether or will fall within the definition
of regulated nonbusiness private motor carriers of passengers.
A church that owns or leases a bus or van will be a "nonbusiness
private motor carrier of passengers" if: (1) the bus or van
has a gross vehicle weight of 10,001 or more pounds or is designed
to transport more than 15 passengers (including the driver), and
(2) the bus or van is "involved in interstate transportation
of passengers," which basically means taking the bus or van
outside of the state in which the church is located.
Local churches are exempt from the regulations if:
- they do not take the bus or van outside of the state in
which the church is located, or
- they do not own or lease a bus or van with a gross vehicle
weight or 10,001 or more pounds and do not own or lease a
bus or van that is designed to transport more than fifteen
passengers (including the driver).
For example, a local church that is located in a town at a state
line and has a van or bus that carries sixteen passengers (including
the driver) and crosses the state line to transport people to
church every Sunday is subject to the federal regulations (regardless
of the gross weight of the vehicle or number of passengers it
holds). On the other hand, a 20,000 pound bus designed to hold
fifty passengers that is never used to cross state lines is exempt
from the federal regulations. A 14,000 pound van that is
designed to hold eighteen passengers and occasionally crosses
state lines is subject to the new regulations. The same van that
is never used to cross state lines is exempt from the new regulations.
If the regulations apply to your church, here are the requirements
for nonbusiness private motor carriers of passenger:
- The driver must have a commercial driver's license (issued
by the state).
- The vehicle must be marked on both sides with the motor
carrier's name or trade name; city and state of the church;
and motor carrier identification number preceded by "USDOT."
- The driver must be in good health, be at least twenty-one
years of age, speak and read English well enough to do his
or her job and respond to official questions, be able to drive
the vehicle safely, be able to determine whether the vehicle
is safely loaded, know how to block, brace, and tie down cargo,
have only one valid driver's license, and not be disqualified
to drive a commercial motor vehicle.
- The driver must comply with the following safety requirements:
be sure the vehicle is safe and properly working before each
trip and must ensure that emergency equipment is in place,
buses must stop at all railroad crossings, the parking brake
must be set when a driver leaves a vehicle unattended, and
emergency warning devices must be activated in an emergency,
headlights must be used from one-half hour before sunset to
one-half hour after sunrise (or anytime there is not enough
light to see clearly 500 feet away), drivers who are involved
in an accident must stop immediately and assist injured persons
and take steps to prevent additional accidents at the scene,
drivers must not smoke when the vehicle is being fueled, and
written permission from the owner of the vehicle is necessary
for passengers to ride.
- The vehicle must be properly equipped with: adequate lighting
devices, reflectors, and electrical equipment, brakes, certain
specified glazing and window construction, coupling devices
and towing methods, emergency equipment, protection against
shifting or falling cargo, and appropriate frames, cab and
body components, wheels, steering and suspension systems.
The vehicle's fuel system must be maintained to the original
manufacturer's standards, and certain specified miscellaneous
parts and accessories may be required.
- The driver must not drive more than ten hours following
eight consecutive hours off duty; must not drive after being
on duty for fifteen hours; must not drive after being on duty
more than sixty hours in any seven consecutive days. A driver
log is a helpful way to comply with this particular regulation.
(Note: The purpose of this requirement is to prevent driver
fatigue; be careful about the requirement when your driver
is also a professional driver for another organization, because
the time is cumulative).
- The vehicle must be regularly inspected, repaired, and
maintained, and all vehicle parts and accessories must be
in a safe and proper working order at all times; push-out
windows, emergency doors, and emergency door marking lights
in buses must be inspected at least every ninety days.
For more information about the regulations, call the FHWA at the
DOT office in your state or the national FHWA office in Washington,
D.C. (202-366-4009 or 202-366-0834). A Federal Motor Carrier Safety
Regulations Pocketbook is available for a small fee from J.J.
Keller & Associates (1-800-327-6868) (publication 19-ORS).
The price is $3.50 plus shipping and handling. You should also
check to be sure your own state has no regulations that would
affect the church’s use of vans or buses. |
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Arson
and Bombing Attacks on Churches |
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Since the mid-1990s, there has
been an outbreak of arson and bombing incidents against local
churches. While the problem seems to be decreasing, there is cause
for concern, and incidents are still being reported. Churches
are easy targets for the arsonist. Most of the time they are unoccupied
and schedules of activities are predictable. Arson is often an
afterthought to cover up another crime or a crime of emotion.
Whatever the reason for the increases, the federal government
has taken an aggressive stance against these acts. In 1996 the
government established the National Church Arson Task Force. For
more information on arson and bombing attacks on churches you
can contact the Bureau of Alcohol, Tobacco, and Firearms:
Bureau of Alcohol,
Tobacco, and Firearms: (800)800-3855
ATF National Arson Hotline: (888)ATF-FIRE
ATF National Bomb Hotline:& (888)ATF-BOMB
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Arson
Prevention |
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Arson is the nation's leading cause
of property damage. While in some cases there is nothing that
can be done to prevent a determined person from committing such
acts of violence, there are measures that can be taken to decrease
the potential for an arson attack.
See the Arson
Prevention Checklist for helpful guidelines. —
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Insurance
Resources |
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Insurance Pamphlets and Brochures |
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Church Mutual
- Church Mutual offers an array of free videos, booklets, posters, newsletters and other safety information.
GuideOne
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Other Useful Risk Management/Insurance Forms |
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— Files marked with this icon can
be downloaded in printable Adobe Acrobat format. This file requires
the free Acrobat Reader. For best results, right-click the link
(or click and hold for Macintosh), select "save target as" and
save the document to your desktop for viewing and printing.
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