May 2014
Finance and Administration

Help When You Need It

It’s an early April afternoon in the Midwest. The sky is turning a sickly shade of gray-green, and the wind is rising. A warning siren starts blaring and a text alert pops up on your cell: a tornado has touched down nearby and is moving toward the church. You quickly gather staff and volunteers and shepherd everyone into the basement below the parish hall.

Half an hour later, you emerge to see that the 150-year-old church building has been severely damaged. The steeple is down, stained glass windows are shattered, a fallen tree has collapsed the wall of the sanctuary and another has crushed the roof of the parish hall that houses the Sunday school classrooms and thrift shop. There is also extensive water damage.

How broad is your property coverage, and how fast can you get some help?

Since 1929, The Church Insurance Companies[1] have provided the broadest property and casualty insurance available to Episcopal churches and institutions, representing the best interests of the Episcopal Church at times of loss. We are well-versed in the special risks that churches face, and are eager to offer you risk management strategies to help prevent loss as well as mitigate the damage should it occur.

It is important to realize that not all property and casualty insurance is the same. Churches should be wary of purchasing typical off-the-shelf business policies. A church is not a business; rather, it is a unique type of entity with unique risks and should have a policy that is designed to meet its specific needs.

Property Coverage

A blanket policy is to be preferred over a policy with specific limits because a blanket policy pools together the limits of all your property and contents into one figure. The Church Insurance Agency Corporation (CIAC) goes a step further and offers insurance where a diocesan blanket that pools together all the values in a particular diocese, virtually eliminating the possibility of a church or church institution being underinsured for a covered loss. This is particularly valuable in the case of natural disasters such as Hurricane Sandy.

We recommend that churches avoid coinsurance – which has a penalty for being underinsured at the time of loss. We also suggest churches avoid any policy that has actual cash value coverage. Rather than replacing your property with new material, this form of coverage provides only for the current value of your property.

The contents of the buildings should be inventoried on a regular basis so that you have an up-to-date record, should damage or loss occur. A good way to do this is to videotape or take photos of each room. If there is no one on staff who has the time to do this, consider assigning the task to your youth group. Churches with fine arts should have a discussion with their insurance representative to determine if they are being properly insured. A parish inventory booklet is available for download here.

It’s important to perform a walkthrough of the property and buildings periodically with an eye to reducing risk. Most dioceses participate in CIAC’s Episcopal Safety Program.

If you would like CIAC to perform a safety walkthrough at your church, simply call us at 800.293.3525 to request one. You can download all of CIAC’s walk-through checklists here.

What should property coverage include?

Property coverage should include systems breakdown coverage or what used to be referred to as “boiler and machinery.” This covers the sudden and accidental breakdown of your equipment. While it used to refer solely to heating and cooling, it has been expanded over the years to include such things as electrical arcing that can destroy your phone or computer systems.

Your property and casualty insurance should also include coverage for employee dishonesty which covers cases in which, for example, an employee absconds with church funds or possessions. Monies and securities coverage provides for situations in which, for example, someone not employed by the church helps themselves to the contents of the offering plate.

What is an extension of coverage?

CIAC policies include extensions of coverage that are common to all policies, and also include extensions that are specific to churches and are intended to cover additional costs following a loss. A common extension of coverage is for extra expenses – for example, the cost of an alternate place for the congregation to worship while you are rebuilding. You may also find it useful to enter into a reciprocal use agreement with another local church.

In Summary…

In this case, the church had broad property coverage including an extension of coverage for extra expenses so they could worship elsewhere while rebuilding, and had recently performed an up-to-date inventory of contents. A little over a year after the tornado, the bishop rededicated the restored church in a joyous service of thanksgiving.

We encourage you to review the property and casualty program that protects your church. If you represent an Episcopal church or institution, we are available to speak with you at any time, whether or not you are insured through CIAC. For risk management advice or insurance services, please call us at 800. 293.3525. And please visit us at where other resources are available.

Steven Follos is vice president and manager, The Church Insurance Agency Corporation. He
has dedicated his career to the protection of the parishes, dioceses, and other institutions of The Episcopal Church. He has 23 years of experience insuring religious organizations, 18 of them with the Church Pension Group.

At CPG, Steven is responsible for leading The Church Insurance Agency, which serves more than 7,000 and extension ministries.

[1] Collectively, The Church Insurance Agency Corporation, The Church Insurance Company, The Church Insurance Company of New York, and The Church Insurance Company of Vermont. Today, we serve 90 Episcopal dioceses and more than 6,000 Episcopal churches with customizable policies that offer more protection, such as flood coverage and other unique features not available from other insurers, and usually at lower costs.

Try This: When was the last time appraisals were done on your stained glass windows and other fine arts objects? This Fine Arts Appraisal Resource includes a list of websites to help you identify experts to help you with this work. Arts Appraisal


Church Pension Group ("CPG") is a trade name under which The Church Pension Fund and its affiliates serve the needs of the Episcopal Church community and does not, itself, issue insurance policies. The Church Insurance Companies provide property and casualty insurance and reinsurance coverage and other related services for various property and casualty risks for the Episcopal Church and its provinces, dioceses, parishes, missions, agencies, institutions and other entities.

Property and casualty insurance products are underwritten by The Church Insurance Company of Vermont, a Vermont domiciliary with its home office located at 210 South Street, Bennington, VT 05201, The Church Insurance Company of New York, a New York domiciliary, located at 19 East 34th Street, New York, NY10016, and by other companies (not affiliated with CPG) for which The Church Insurance Agency Corporation, itself a member of CPG, acts as an insurance agent or broker.

Coverage options and exclusions, and policy availability may vary by state and geographical area. The Church Insurance Companies are not licensed in all states. Information and descriptions of policies and services are provided solely for general informational purposes and are not intended to be complete descriptions and does not create a contract or an offer of coverage. For complete details of coverage, including exclusions, limitations and restrictions, the actual policy or certificate should be consulted.

Information provided herein is not intended to constitute an offer to sell, nor is it a solicitation for, any product or service offered by The Church Insurance Companies or other unaffiliated insurers. Neither CPG nor The Church Insurance Companies guarantees the performance of the legal and contractual obligations of any unaffiliated insurer.

This article is part of the May 2014 Vestry Papers issue on Finance and Administration