Tag: church insurance


While for property and casualty (think auto, personal injury, etc.) insurance coverage specialty companies have arisen that sell coverage to churches, in the health insurance arena there has not yet arisen a company willing to tailor coverage to a church, at least not in all states.  Believing that the reluctance of companies to offer tailored coverage (excluding abortion or other procedures) came solely from regulatory pressure, in Skyline Wesleyan Church v California Department of Managed Health Care, Order on Cross Motions for Summary Judgment, (SD Ca., 2018), the church sued the regulatory agency to force a change in policy.  Unfortunately, the regulator had never refused to approve a tailored insurance policy and none were ever offered to it to consider.  The church was unable to prove that there was behind the scenes a conspiracy or unwritten regulatory pronouncement in place.  Because the church could not obtain an injunction against a regulation that did not appear to exist, the case was dismissed.

Denominations and church associations can only address this by becoming self-insured, or establishing stop loss programs, or buying or forming their own insurance company.  In the health insurance area these are extremely difficult plans to manage.  In stop loss plans operated by the author, two or three years of below market costs would be followed by an adjustment year where the plan costs exceeded the market.  This was caused by the roll over of the excess coverage policies the plans purchased adjusting to the incredible rate of price increase in medical services prevalent for decades in western civilization.

The lesson from the Skyline case may also be that political or economic solutions are not always found in litigation.  While there are areas in which a failure to engage in legal process could cost churches their freedoms, some areas require political or economic action.  A person with one vote is not as powerful as one person with a check in moving political walls.  While the church corporation may not be able to do much politically, there is no stopping the membership.


One of the axioms that govern lawsuits is that litigating about litigating is almost always the best first strategic move by the defense.  It is almost always the Plaintiff in a lawsuit that has suffered some loss and then to recover the loss legal fees and expenses must be paid.  This has the impact of deepening the loss without certainty of recovery.  Also, litigation choices, which are almost always at best guesses about future events in a case, e.g., whether this expert witness will persuade when another might not, or whether a witness will give reliable trial testimony or whether a deposition should be taken to reduce that uncertainty, will drive the cost but not always the outcome.

An example of this is Ministerio Evangelistico International v United Specialty Insurance Company, Slip Op. (SD FL, Miami Div., 2017).  Ministerio endured water damage from a roof leak and could not reach an accord with its insurance carrier.  The opinion does not disclose the reason for the dispute but a reasonable speculation might be that the insurance carrier thought a neglected maintenance issue was the culprit rather than roof damage from a casualty loss.  Regardless, Ministerio sued but sought a declaratory judgment, a declaration of rights under the policy, rather than merely a breach of contract claim or a bad faith claim.  The insurance carrier moved to dismiss the declaratory judgment claim, only one of two claims the church had, and the court dismissed it.  The case continued as a breach of contract claim but Ministerio likely incurred legal fees resisting the carrier’s motion to dismiss the declaratory judgment claim.  The case started in state court at the end of 2015 and by April 2017 had only reached the Answer stage, meaning a year and a quarter passed.  Many federal courts in the United States can still bring a case to conclusion in that amount of time.

The longer a case lasts, higher legal fees, higher expenses, and greater fatigue are often the result.  Insurance carriers, however, because litigating risk is part of their business model and part of their cost of doing business, are less sensitive to such fatigue than would be a church.  Thus, a lesson from this case is that church litigants should be focused and not scattershot in their lawsuits to avoid, if possible, the trap of litigating about litigating.  Indeed, in this case, after a year of litigating about litigating, the case is not over but is barely under way.



Allegations of sexual abuse, especially of children, by church members or church leaders are painful and difficult cases that will scar a congregation sometimes for decades.  Nevertheless, there are limitations on lawsuits that sometimes allow a wrongdoer to escape secular punishment.  One type are the statutes of limitation that require a lawsuit or criminal charges to be filed before the expiration of a length of time generally imposed by legislation.  Statutes of limitation are based on the recognition that witnesses die or age beyond retrieval and documents and scientific evidence age beyond usefulness or are lost.  [Try converting an uncorrupted photo, image or video from a format used before Y2K, for example, much less a corrupted data file.]  But, sometimes the pain of the victim is permanent.


 In Lewis v Bellows Falls Congregation, Slip Op. (D. Vt., 2017), the statute of limitations provided by state law for claims of “childhood sexual abuse” is six years beyond the age of majority (age 18) or from knew or should have known (i.e., the discovery rule).  In the Lewis case, the sexual abuse was known before the victim reached 18 leaving the 18 year old six years to file a lawsuit.  But, the victim did not file a lawsuit until nine years after reaching age 18.


The victim argued that the alleged fault of the church was not discovered until some years after the abuse which should have extended the statute of limitations under the discovery rule.  However, because the abuse occurred in the home of the wrongdoer and the victim was not present in the home of the wrongdoer on a church function, the church had no duty monitor the wrongdoer (or ability to monitor).  The victim was in the home of the wrongdoer through no fault of her own, or her parents, but that did not mean the church had control over the wrongdoer in the wrongdoer’s home.  Had the abuse been on church property or at an official church function, there might have been a question of fact for a jury to consider regarding the responsibility of the church.


 This outcome would have been the same for secular organizations like schools and day care providers.  Just because two families meet at some organization like a church or school and develop a relationship outside of the purview of the organization that leads to sexual abuse does not usually alone represent “agency” or “control.”  “Here, the Court can discern no evidence that True was continually subjected to the will of … the Congregation … .”


One lesson churches should take from these cases is that liability insurance (which will pay the legal fees to defend the case) should be maintained year in and year out with no gaps and for these types of cases should have very long “tails,” if needed.  Well trained insurance agents understand and can solve these issues affordably.  Any doubt should be resolved by consulting a second insurance agent independent from the first or legal counsel that is knowledgeable about insurance policy lore.


Few things present a greater maintenance challenge to a church than the roof.  Even medium size churches usually have under the roof a lot of square footage, some not being visually beheld, if at all, except for very short times during their main worship time.  Also, as a volunteer organization, typically led by Pastors that have been to Bible college or seminary but not worked as roofers or contractors, churches are usually hard pressed to maintain a commercial size roof.

Insurance companies and churches have one thing in common:  the insurance company will not invest in underwriting prior to policy issuance and the church usually has poor roof maintenance records even if the roof has been well maintained.  Neither usually has a photo history updated annually or bi-annually.

In State Auto Property Casualty Insurance Company v El Shaddai Christian Ministries, Inc., Slip Op. (USDC, SD, N Div, 2017), the church claimed it had roof damage and water intrusion from a storm in March 2012.  The church had policies, one at a time, with Brotherhood Mutual, State Farm, and State Auto, one right after the other.  The church made the claim on all three policies, again one after the other, and was denied by all three on the claim that the roof damage was caused by neglect.  The Court was not deciding the case; the Court overruled State Auto’s Motion for Summary Judgment finding factual disputes and set the case for trial later in 2017.  The church had to hire a PhD in meteorology to prove there was a storm and an expert that opined the damage to the roof was storm related.  The insurance carrier expert claimed the damage was due to neglect, wear and tear.

All three insurers did not appear, from the evidence reviewed in the opinion (but which might be presented at a trial), to have performed underwriting prior to policy issuance beyond accepting an application and a check.  While it may be that at trial the carrier may be able to prove that the application contained misrepresentations, that was not the subject of the Court’s opinion.  Likewise, the church might have substantial evidence that all three carriers were on notice and the church was transparent in its business dealings with the carriers.  If so, the church will be hard to beat.