How much does insurance cost for churches?

Churches spend an average of $42 per month, or $500 per year, for general liability insurance. Although not required by law, a general liability policy may be needed to sign a lease or work with certain clients.

General liability coverage protects your nonprofit from common third-party risks, such as visitor personal property damage or bodily injury. It also pays for lawsuits related to copyright infringement and defamation, including slander and libel.

For example, if another church claims that your church leader made a disparaging statement about them on social media and decides to sue, a general liability policy would pay for any legal costs.

Below is the average general liability insurance policy for churches that buy from TechInsurance:

Premium: $42 per month
Policy limits: $1 million per occurrence; $2 million aggregate

The cost of general liability insurance is based on several factors, including policy limits, size and location of your church's business property, and any special event insurance or additional insured endoresements you may have.

Churches pay an average of $99 per month, or $1,193 per year, for a business owner's policy (BOP).

A business owner's policy bundles general liability coverage with commercial property insurance at a lower cost than buying these policies separately.

You can often include other types of coverage, such as business interruption insurance (or business income coverage) to cover the costs of a temporary closure. Additionally, you can add endorsements to your policy to expand coverage, such as a business interruption insurance policy.

A BOP provides insurance for your church in the event of a fire, storm, or theft. It also protects against common liability claims, such as a visitor who slips on a wet floor in your church building's daycare center and suffers an injury that leads to medical bills.

This is the average business owner's policy for churches that buy from TechInsurance:

Premium: $99 per month
Policy limits: $1 million per occurrence; $2 million aggregate
Deductible: $1,000

Churches that qualify for a BOP usually are small in size (fewer than 100 employees) and low risk. Learn more about business owner's policy eligibility.

The cost of a business owner's policy depends on factors such as the value of your business property, the policy limits you choose, your location, and the amount of foot traffic in your church.

On average, nonprofits (including churches) pay $56 per month, or $674 per year, for professional liability insurance.

Professional liability insurance covers lawsuits related to professional negligence. It would cover attorney's fees and other legal expenses if a member of the clergy or staff provides pastoral counseling that is deemed to have been harmful or negligible.

You might also see this type of coverage referred to as errors and omissions insurance (E&O) or professional indemnity insurance. Church investors and members might require you to carry professional liability coverage, as it'll cover legal bills that might otherwise affect them.

This is the average professional liability policy for churches that buy from TechInsurance:

Premium: $56 per month
Policy limits: $1 million per occurrence; $1 million aggregate
Deductible: $1,000

Insurers consider several factors when determining professional liability insurance rates, including the coverage limits and deductible you choose, the size of your church, the type of professional services you provide, and your claims history.

Church owners spend an average of $60 per month, or $724 annually, for workers' compensation insurance. To comply with state requirements and avoid penalties, churches with one or more employees typically are required to purchase this policy.

Workers' comp coverage pays for medical expenses and disability benefits when you or an employee suffers a work-related injury or illness. For example, if a sound engineer on your church payroll develops carpal tunnel, a workers' comp policy would pay for their treatments and lost income while they recover.

Workers' compensation coverage also often includes employer's liability insurance, which pays for defense costs and other legal fees in the event of a lawsuit related to workplace injuries.

State insurance requirements and the number of employees you have will determine whether your business is required to carry this coverage. Many engineering businesses with one or more employees are required to purchase workers' comp.

For example, in California and New York, you'll need workers' comp after your first hire. However, in Florida, you'll typically need workers' comp after the fourth hire. In Texas, coverage is optional.

Even though workers' comp may not be required for sole proprietors or independent contractors, it is highly recommended since most health insurance plans can deny claims for injuries that occur at your church.

The cost of workers' comp is based on numerous factors, including the number of employees you have and their occupational risks.

Churches spend an average of $141 per month, or $1,696 yearly, for commercial auto insurance. Almost every state requires this type of insurance if your church owns any company vehicles.

If your business vehicle(s) are involved in an accident, a commercial auto policy would help cover property damage costs and any medical expenses. This coverage also helps pay for costs related to vandalism, weather damage, and theft.

To protect personal, rented, and leased vehicles used for business purposes, you'd need hired and non-owned auto insurance (HNOA) instead.

The cost of commercial car insurance depends on many factors, including your employees' driving records, policy limits, the number of vehicles you own and their value, and your coverage options.

Churches pay an average of $71 per month, or $854 per year, for directors and officers insurance.

Directors and officers insurance is a type of management liability insurance that protects your board members, officers, and directors against lawsuits related to management decisions.

Management decisions can include unethical decisions, intellectual property (IP) infringement, libel, failing to follow company bylaws, and other professional mistakes or errors in judgment.

For example, if your executive officers are sued by church members for mismanagement of funds, your D&O insurance would cover the costs of their legal defense. Some officers, board members, and investors may require this policy before agreeing to provide guidance for your church. 

Insurers consider several factors when determining directors and officers insurance costs, including the coverage limits and deductible you choose, your location, how many directors you have, and your claims history.