Insurance coverage for your ministry’s leadership team.
Those who volunteer on your board strive to put the ministry’s interests first and manage the organization well. But they’re human. They can make mistakes, use poor judgment, or fail to act. This can lead to lawsuits alleging wrongful acts by your ministry and its leaders. Without the proper insurance, your ministry and its leaders could find their bank accounts drained by legal defense costs, even if you ultimately win.
Directors & Officers (D&O) or Leadership Liability Coverage pays for financial damage claims caused by the negligence of your ministry’s governing board or other leaders and their spouses for decisions made in connection with ministry operations. D&O is a critical coverage to not only protect your ministry, but also the personal assets and reputations of the employees and volunteers who govern your faith-based organization.
Do you serve on the board of your ministry, or expect to serve in the near future? If so, congratulations. Serving on the board of your local church or ministry is a great honor, and a wonderful way to contribute your character and counsel to the advancement of the kingdom.
As a board member, you take on responsibility above and beyond that of a regular attendee. You and your fellow board members must make some of the most important decisions impacting the organization including approving budgets, buying and selling property, and borrowing money.
As you can imagine, these types of decisions can invite a wide variety of lawsuits questioning the board’s decisions and allocation of resources. Claims of fraud, breach of fiduciary duty, misuse of funds, and waste of an organization’s assets are among the most common complaints boards face.
Allegations of mismanagement place the ministry at risk, but can place you personally at risk as well. As an individual, your personal assets may be exposed if the ministry has not incorporated and taken the necessary steps to protect individual members from personal liability.
Incorporating your ministry can be a good first step to protecting individual members of your organization. However, this is not a replacement for the right insurance coverage. Even if your board were to win a case and prove immunity in court, you must still consider the thousands of dollars in legal defense costs it may require to fight even a fraudulent claim.
When evaluating coverage, look closely at how the policy defines an “insured.” Standard D&O policies for companies cover only the directors and officers. Look for coverage that also will protect employees or volunteers who make decisions on your ministry’s behalf. ChurchWest can broker D&O coverage that defines the term ‘insured’ broadly to protect your ministry, its leaders, and their spouses, in relation to any leadership activity they undertake on your ministry’s behalf.
These are a few Directors & Officers claims that we’ve seen ministries like yours face. While every situation is unique, these scenarios help illustrate the types of risks that this coverage can protect against.
In conclusion, Directors & Officers coverage is an essential protection for your ministry to defend your leadership’s decisions and reduce personal liability for the leaders of your ministry.
Worried about the cost? A ChurchWest Ministry Insurance Advisor can bundle your D&O coverage with other ministry-specific coverages as part of a comprehensive insurance package. By bundling your coverage with ChurchWest, you can get the best protection at the most affordable price.
Click the “Get a Quote” button at the top of this screen to contact your local advisor, or explore our other coverage pages to learn more about guarding your ministry’s finances and reputation.