When a wedding guest at a Unitarian Universalist church in the Southwest had too much to drink and fell down the basement stairs, he sued the church for many thousands of dollars. The church's insurance company settled the case for $2,000. Said the church administrator, "Had we been actually negligent and had he not been drinking, it could have been a much more substantial claim.”

At another church someone stole about $15,000 in grocery scrip from a safe in the church office "which just about everyone had the combination to," a member says. Insurance covered $2,000 and the church had to pay the rest.

In another church when a member fell on an uneven sidewalk and shattered her elbow, the church used its own liability insurance to pay medical costs, probably preventing a lawsuit, says a church official.

Congregations are subject to many kinds of liability, from slip-and-falls, to theft, to damage to a rented building. Adequate liability coverage is critical, says Patrick Moreland, Vice President of Church Mutual Insurance Company, Merrill, WI, the Unitarian Universalist Association (UUA) recommended insurance carrier.

An article in the previous issue of InterConnections (March 2001) reviewed property insurance coverage. This article explores liability coverage. In addition to the obvious need for liability coverage for slip-and-falls, churches should consider the following liability issues, says Moreland:

• Sexual misconduct/molestation. Accusations can arise at any church. Even if allegations are false, the church and those accused can incur large legal defense costs.
• An errors and omissions policy (called Directors and Officers Liability) will permit leaders to make decisions without undue fear of lawsuits.
• Pastoral counseling, which protects the pastor and the church, should be covered by insurance, but often isn't. Lay counselors should also be included in liability coverage.
• Make sure liability and "medical expense" coverage applies not only at church but also away from it. Medical expense insurance covers the costs of less serious injuries that occur at your church or on a church-sponsored activity, regardless of fault. Be sure it covers members, guests, and volunteer workers, plus sports-related injuries.
• If you use someone else's building, you may be legally responsible for damage you cause to it. Advise your agent so that your policy may be endorsed to protect you. Similarly, you may want proof of insurance from those who use your facility.
• When you rent or borrow a vehicle, or ask someone to drive on behalf of your church, you create a liability exposure for your church. Purchase "hired and non-owned" liability coverage. Let volunteers know their insurance is primary when they drive their vehicle on your behalf. And that, in most cases, damage to their vehicle is covered only by their own insurance.
• Most states require churches to have workers' compensation insurance. Even if not required, benefits set by your state must still be paid to full-time and part-time employees.
• Also consider buying bond coverage to protect against dishonest employees and volunteers who are entrusted with church money and other property.