5 Insurance Mistakes Churches Make (And How to Avoid Them)
If you’re responsible for your church’s insurance, you’re probably not an insurance expert, and that’s okay. You have a congregation to lead, programs to run, and a mission to fulfill.
Massachusetts congregations face a specific set of carriers and requirements. Our guide to church insurance in Massachusetts covers them in full.
But after reviewing dozens of church policies across Massachusetts, I keep seeing the same mistakes. Some leave churches dangerously exposed. Others waste money on coverage that doesn’t fit. Here are the five I see most often.
1. Insuring the Building at Market Value Instead of Replacement Cost
This is the most expensive mistake a church can make.
Your church building might be worth $800,000 on the real estate market. But if it burned down tomorrow, what would it actually cost to rebuild? For historic Massachusetts churches with stained glass, custom woodwork, and century-old craftsmanship, reconstruction costs often run 2-3x the market value.
I’ve seen churches with beautiful Gothic Revival buildings insured for $1.2 million when actual replacement would cost $3 million or more. After a total loss, they’d face a devastating shortfall.
The fix: Get an appraisal specifically for insurance purposes. Make sure your policy covers full replacement cost, not actual cash value.
2. Skipping Abuse and Molestation Coverage
No church wants to think about this. But claims happen, and they’re among the most financially devastating a church can face.
Many standard commercial policies exclude or severely limit abuse and molestation coverage. Some churches assume they’re covered when they’re not. Others skip it intentionally to save money, a decision that could bankrupt the church if an allegation arises.
The fix: Verify your policy includes adequate abuse and molestation liability coverage (at least $1 million, though $2 million is increasingly recommended). Implement background checks and written protection policies, insurers often require them anyway.
3. Forgetting About Off-Site Events
Your general liability policy covers slip-and-falls in your sanctuary. But what about the youth group camping trip? The mission trip to Puerto Rico? The community service day at the local park?
Many churches don’t realize their standard policy has limited or no coverage for activities away from church property. One accident at an off-site event could expose the church to significant uninsured liability.
The fix: Review your policy’s off-premises coverage. Ask specifically about mission trips, retreats, and community events. You may need to add coverage or purchase special event insurance for certain activities.
4. Treating Workers’ Comp as Optional
Massachusetts law requires workers’ compensation insurance for any organization with employees, including churches. There’s no religious exemption.
Some churches try to classify everyone as volunteers or independent contractors to avoid workers’ comp. This rarely holds up legally. If your “volunteer” administrative assistant works set hours, uses church equipment, and takes direction from the pastor, they’re probably an employee in the eyes of Massachusetts law.
Getting caught without required workers’ comp means fines, back premiums, and personal liability for church leadership. If someone gets hurt, the church pays out of pocket.
The fix: If anyone receives regular compensation for their work at your church, even part-time, talk to an insurance professional about workers’ comp. The cost is usually much lower than churches expect, and it’s not negotiable under Massachusetts law.
5. Never Reviewing the Policy After It’s Set Up
Churches change. You add a preschool program. You buy a van. You renovate the fellowship hall. You hire a part-time youth director.
But the insurance policy from five years ago doesn’t know any of that. I regularly see churches paying for coverage they no longer need (like a van they sold) while missing coverage for new exposures (like the counseling ministry they started).
The fix: Review your policy annually, ideally 60-90 days before renewal. Walk through any changes in staff, programs, property, or activities. Make sure your coverage reflects who you are today, not who you were when the policy was written.
Get a Free Policy Review
I offer free policy reviews for Massachusetts churches. Send me your current declarations page, and I’ll tell you what’s working, what’s missing, and whether you’re paying a fair price.
No pressure, no obligation, just clarity on whether your church is properly protected.
Contact me:
Contact me: [email protected] | 978.712.0111 | halestreetinsurance.com/church-insurance
Not ready for a full review? Start with our church insurance checklist, a short list of the coverages and limits worth confirming on your current policy before you talk to anyone.
If you would like a second opinion on whether your church insurance program is properly structured for insurance purposes, contact us for a free church risk assessment.
Contact Hale Street Insurance at 978.712.0111 or [email protected] for a free church insurance review. You can also visit our church insurance page or request a quote to get started.
Jake Lubinski is the founder of Hale Street Insurance and a licensed insurance broker with years of church board and stewardship experience. Based in Boxford, MA he works with churches throughout Massachusetts and the US to build insurance and risk programs designed around how ministry actually operates. Reach Jake at [email protected] or 978.712.0111.
Related reading: How to Compare Church Insurance Providers | Church Van Insurance: Driver Rules, 15-Passenger Vans, Volunteer Drivers | Small Church Insurance: Coverage and Cost Under 100 Members | Pastoral Professional Liability: What It Is and Who Needs It
