Legal Issues Facing Churches

10 Legal Issues Facing Churches and Nonprofit Religious Organizations Across America

Churches and religious organizations are not immune to legal problems. They can be especially vulnerable to certain types of church legal issues, which could require a qualified church law attorney.


Many new church plants believe they will never face legal trouble and are tempted to obtain the least insurance coverage.  


The good news is that there are steps churches and religious organizations can take to minimize their risk of exposure to these types of legal issues.

What are the Top 10 Legal Issues Facing Churches and Religious Organizations?

1. Church Governance

Church governance is one of the top 10 legal issues facing churches and religious organizations due to the potential for property and governance disputes. These disputes can arise when a church splits from its larger organization and in religious employment litigation cases.


Having qualified church attorneys involved in these matters is essential to ensure that both sides’ interests are protected, which is why choosing the right board members for a church is crucial.


2. COVID-19 Restrictions

from 2020-2022 churches and religious organizations faced many legal issues due to COVID-19 restrictions, such as insurance policies being reviewed to cover potential liabilities, understanding and complying with legal requirements, contacting an attorney if constitutional overreach is suspected, making records of the protocols put in place for reopening, and whether liability release waivers would be effective.


It is crucial for churches and religious organizations to review their church insurance policies regarding COVID-19-related claims, understand the regulations of their local or state guidance given by the CDC concerning reopening protocols put in place, contact an attorney if there are concerns about constitutional overreach with these protocols or regulations set forth by local/state governments or agencies.


3. Biblical Church Discipline

Biblical church discipline is essential for churches and religious organizations, as it helps ensure members follow the church’s teachings. It involves disciplining members to help them stay true to the faith and can take various forms, including verbal warnings, suspension from services, and expulsion from the church.


The autonomy doctrine allows churches to exercise their right to discipline members as they see fit. However, if a person is disciplined in a manner that violates their rights or is deemed excessive by courts, they may be able to sue the church.


As such, churches must have membership policies that clearly outline expectations regarding attendance and behavior, so they can argue based on those policies in court if necessary.


4. Abuse and Molestation Claims

Abuse and molestation claims are a top legal issue facing churches and religious organizations because they can cause significant financial losses and lead to division among church members and property loss. If a church does not take steps to prevent abuse, it can be sued for damages caused by the alleged incident.


Your church liability insurance program must include coverage for sexual misconduct liability insurance.


5. Improperly Maintained ByLaws

The consequences of having improperly maintained bylaws for a church or religious organization can be severe. This includes the inability to sell or use the land as collateral for a loan, title problems, disputes with landlords over issues such as maintenance or trouble with other tenants, and even legal action.


To avoid these potential consequences, churches should ensure that their organizational documents are up-to-date and properly maintained.


6. Failure to Understand a Churches Legal Responsibilities

Churches and religious organizations have many legal responsibilities that vary from country to country. These include a negligent selection of youth workers, child abuse reporting, church security, employment liability, the ministerial exception (which classifies staff as clergy), and discrimination based on morals or religion.


Churches and religious organizations must consult an attorney to comply with all necessary legal requirements. The attorney can also help them navigate through any risks or lawsuits that might arise from their operations.


7. Church Property Disputes

Disputes over church property can be a challenging situation to navigate. On the one hand, the church itself may have a personal connection to the property in question, so it is vital that any decision made respects that connection.


On the other hand, the disputes themselves can be complex and involve multiple parties, making it hard to come to a fair resolution. They typically involve matters of faith and emotion which can further complicate the dispute.


In these situations, all parties must remain calm and open to negotiation to reach a satisfactory arrangement for everyone. Ultimately, it is essential that any agreement reached is compliant with applicable laws and regulations to ensure its validity and enforceability.


8. Violation of Employment Laws

Churches and religious organizations need to follow employment laws to protect their workers and themselves from potential lawsuits. Employment laws ensure that all employees are treated fairly, regardless of their religious beliefs or affiliations.


Following employment laws also helps minimize the risk of negligent hiring practices or discrimination based on morality or religion.


Churches should buy workers’ compensation insurance, employment practice liability insurance, and group health insurance to help protect the employees or volunteers and the church.


9. Bad Board Meeting Decisions

Board members of churches and religious organizations must be chosen carefully to ensure the legality of their operations. Poorly informed decisions made in board meetings can have serious legal repercussions, including the risk of litigation and damages.


In particular, issues such as employment discrimination; violation of privacy laws; improper taxation; inadequate oversight of finances and fundraising activities; inappropriate use of land or property rights; violation of copyright or trademark laws; improper non-profit status frauds/scams, and other violations may arise if proper attention is not given to selection or management practices.


The board should discuss all these matters before any decision is taken to avoid legal disputes. Churches should consider buying directors and officers insurance to protect the board members.


10. Embezzlement

Embezzlement is another top legal issue facing churches and religious organizations because it can be challenging to monitor the church’s finances, making it easier for financial fraud to go unnoticed. Strict controls should be in place over finances, including checking the backgrounds and credit scores of those accessing finances, designating multiple people responsible for tracking funds, and immediately depositing offerings and checks.


Additionally, email and text alerts should be activated to notify finance team members when there is activity on an account. These measures help reduce the risk of embezzlement at churches or religious organizations.

Prepare for these Potential Legal Challenges

How can Churches and Religious Organizations Prepare for these Potential Legal Challenges?

Develop and maintain up-to-date church bylaws and board policies.

Having up-to-date bylaws and policies is vital for churches and religious organizations as it allows them to operate lawfully, guide their long-term plans and strategic objectives, and provide a framework within which the board can help direct these goals.


Reviewing these documents at least every two years or as needed ensures that any changes in law or regulations are taken into account, protecting the organization from potential legal risks and suits.


Utilize clear communication and documentation to ensure compliance with all applicable laws.

Churches and religious organizations may face many potential legal challenges, such as lawsuits arising from the aftermath of the pandemic, failure to comply with constitutional requirements or other local ordinances or executive orders, inadequate measures taken to prevent the spread of disease, and being treated differently than other entities hosting public gatherings.


Churches and religious organizations must comply with local ordinances or executive orders while understanding and complying with legal requirements to avoid potential lawsuits.


To help mitigate some of these risks, churches should review their bylaws and insurance policies carefully, discuss coverage with their carriers, follow all sanitation protocols required by their insurers for coverage purposes, document their church leadership’s state of mind regarding safety protocols that were enacted, consider adding additional layers of legal protection where necessary (such as liability release waivers signed by attendees before attending services), and enlist professional legal help if needed.


Ensure the church is appropriately insured and that the coverage is regularly reviewed and updated.

Churches and religious organizations need to be adequately insured to protect themselves from risks of misconduct, negligence, and natural disasters. Proper church insurance coverage can provide financial security and help them avoid costly legal suits. By working with a church insurance agent specializing in these matters, churches can ensure that they are adequately covered and meet their needs.


Establish clear policies and procedures for dealing with potential legal issues.

Churches and religious organizations can establish clear policies and procedures to deal with potential legal issues by taking complaints seriously, adopting an anti-abuse policy, conducting background checks on staff and volunteers, speaking to a lawyer anytime an allegation of abuse is raised and making sure titles are clear.


The organization is appropriately described in the deed, having church liability insurance to cover any legal issues that may arise, ensuring they have good zoning in place to protect themselves from potential lawsuits, consulting with an attorney if facing eminent domain requests, and understanding their obligations under RLUIPA.


Remain aware of the latest legal developments and changes in the law.

Churches and religious organizations must remain aware of legal developments to protect themselves from lawsuits and ensure their rights are respected. Such knowledge can help them comply with state laws, understand the Free Exercise of Religion Act (FERA) and Religious Liberty Restoration Act (RLRA), and protect themselves from child abuse accusations.


Additionally, they must be treated equally in advertising and marketing, which can affect their ability to reach out to new members or grow their church. Good liability insurance coverage for churches can also help churches in this area.


Implement best practices for social media use.

Churches and religious organizations should implement best practices for social media use to ensure compliance with applicable laws and regulations. These best practices include having a policy governing social media use, reviewing the policy regularly, having mechanisms in place for investigating potential misconduct, and instituting policies concerning the protection of minors.


Additionally, churches and religious organizations should consider using appropriate safeguards to protect against the potential risks associated with online communication, such as data security protocols.


Develop an emergency response plan in case of litigation.

Churches and religious organizations need an emergency response plan because they could be held liable for events during services. Having a plan allows the church to respond quickly and efficiently should something go wrong, preventing disruption and potential legal action.


Seek appropriate legal advice and guidance as needed.

Churches and religious organizations should take proactive steps to prepare for potential legal challenges. These steps can include having a knowledgeable attorney review their organizational documents, understanding the legal issues that could arise within their organization, and staying up-to-date on current laws related to their activities.


Additionally, churches and religious organizations should have the plan to respond to suits or claims against them.


Educate church members and staff on compliance with all applicable laws.

It is crucial for churches and religious organizations to educate their members and staff on compliance with applicable laws to ensure that everyone is aware of their rights and responsibilities under the law.


Doing so can help protect them from potential liability arising from discrimination claims or other breaches of the law. Additionally, knowing how to comply with applicable laws can help avoid costly lawsuits that could put a church or organization at financial risk.


Monitor changes in COVID-19 restrictions and their impacts on religious organizations.

Changes in COVID-19 restrictions have implications for religious organizations, depending on the state. For those in states with restrictions, these changes could challenge religious organizations. In states without restrictions, however, religious organizations may benefit from the new COVID-19 regulations.


Church leaders need to be aware of their local ordinances and executive orders related to COVID-19 so they can make informed decisions regarding their organization’s activities. Additionally, churches should review their insurance policies to ensure they are covered for potential lawsuits for violating an executive order.

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What Steps Should be Taken if a Church Faces a Lawsuit?

Step 1: Familiarize yourself with the church bylaws and board policies.

The church bylaws and board policies are essential documents that outline the duties, responsibilities, and behavior of board members. They provide a framework to ensure that all decisions follow the spiritual mission and legal requirements.


Furthermore, they guide how to handle various scenarios involving volunteers or employees and protect the church’s financial interests.


Step 2: Understand the laws and regulations in your area.

To avoid potential legal troubles, a church must understand its area’s laws and regulations. By having an attorney on board, a church can ensure that it is up-to-date with the latest laws and regulations, enabling them to remain compliant with applicable laws. Additionally, having an attorney help draft bylaws explicitly tailored to the congregation’s needs can protect leaders from back taxes, debts, and liabilities.


Step 3: Research how other religious groups in your area have been affected by similar laws or restrictions.

It is vital to research how other religious groups have been affected by similar laws or restrictions to gain insight into the potential impacts of such laws or restrictions on a church’s operations. By understanding how other churches and organizations have been impacted, churches can take proactive steps to protect themselves from legal risks.


Step 4: Ensure that all social media policies are up to date.

Churches need to have up-to-date social media policies to protect themselves from legal liability and the potential for scandal. Having a policy in place can safeguard church members by outlining guidelines and expectations on how they should use social media, protecting their images and that of the church. Moreover, having a policy helps to ensure that any content posted on behalf of the church adheres to local, state, and federal laws.


Step 5: Create a plan for how the church will respond to legal issues and be proactive in communicating this plan to the members.

Churches need to plan how to respond to legal issues to protect themselves from potential risks and suits. When a church does not have an established plan, it puts them at risk of being held liable if something goes wrong. An experienced lawyer on their team can help with the planning process, ensuring that all legal matters are considered and managed appropriately.


Step 6: Take measures to avoid a lawsuit, such as being aware of potential issues and staying up to date with relevant laws and regulations.

The best way to avoid a lawsuit is to ensure compliance with all applicable laws, follow the policies and procedures of the organization, and educate staff members on their rights and responsibilities. In addition, churches should take complaints of sexual abuse seriously and have an anti-abuse policy in place, as well as a zero-tolerance policy for such behavior.


Churches should also be aware of any potential title issues related to the land they own or lease worship space from to avoid disputes.


Step 7: Contact legal counsel if necessary.

Churches and religious organizations must contact legal counsel if they face a lawsuit. This can help them understand the legal issues involved in their situation and decide on the best defense. Seeking legal advice early on can prevent costly litigation or adverse decisions in court, protecting the church and ensuring that its Constitutional rights are upheld.


Step 8: Make sure church members are aware of their rights and responsibilities regarding legal matters.

Church members must be aware of their rights and responsibilities regarding legal matters to protect themselves from lawsuits. Knowing the law and having policies in place can help churches avoid discrimination claims and ensure that they follow the laws concerning registering sex offenders and protecting children.


By understanding the legal issues that may arise, churches can also take proactive steps towards avoiding risk by establishing a safe environment policy or updating their 2-adult volunteer rule.


Step 9: Track the progress of legal issues and potential lawsuits.

Churches need to track the progress of legal issues and potential lawsuits to protect themselves and ensure that they follow all relevant laws, such as RLUIPA, which protect their religious freedom.


By staying informed of potential risks, churches can take appropriate preventative measures and potentially avoid serious legal trouble. Suppose a church fails to monitor legal issues or potential lawsuit progress adequately. In that case, it could face costly litigation or other penalties if it is found to have violated any regulations.

Insurance Claim

How can Church Insurance Protect Against Legal Issues Churches and Religious Organizations Face?

Churches and religious organizations need church property insurance to cover the building and its contents and church liability insurance to protect against allegations of negligence or misconduct.


Liability insurance for churches is a critical part of risk management, as churches may face legal issues in some regions of operation.


An independent insurance agent specializing in church or religious organizations can help obtain the necessary coverage to protect against these potential risks and suits.


Integrity Now Insurance Brokers is here to help you with your legal troubles by conducting a full church insurance policy review and ensuring you have insurance coverage.


Contact one of our church insurance agents for help today.  

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