The Church Council (and/or the Insurance/Finance Committee) has the responsibility to secure adequate insurance coverage to safeguard the assets of the church. Fires and thefts do happen on occasion and it is crucial that each congregation protect itself and review its policies on an annual basis. The following types of insurance are the ones that congregational treasurers may have to be personally familiar with:

Worker’s Compensation Insurance

Worker’s Compensation (often called Labor and Industrial Insurance or L&I for short) is a mandatory insurance provided by the employer in the event of employee injury while on the job. Each state has different laws governing Worker’s Compensation and for full details contact your state Department of Labor & Industries. Some states have state-administered programs. Other states allow for the purchase of insurance coverage through private carriers. Some states allow for the optional assessing of the employees for part of the insurance cost. The cost of the insurance is calculated based either on the number of hours worked or on a percentage of payroll costs. It is important to remember that Worker’s Compensation coverage is mandatory. A congregation cannot go without it. It is also important to remember to cover all employees including the pastor. Please contact your state department for further details.

Unemployment Insurance

Churches are exempt from paying federal unemployment tax since they are IRS Section 501(c)(3) exempt organizations. Most unemployment taxes however are assessed by the individual states. Please contact your state Department of Revenue for further details.

Employee Dishonesty Bond

A climate of personal trust is usually assumed in the congregational setting. This is healthy and proper. However, some systems of handling money place individuals in a position in which their honesty can be questioned or in which they may be tempted to sin. Prudent and consistent practices in handling money are needed to maintain a trustful climate.

It is recommended that all persons elected or appointed to handle money in the congregation and all its auxiliaries are covered under an employee dishonesty blanket bond. For further information on Fidelity Bond coverage click here.