Do Churches Have to Carry Workers' Compensation Insurance? Everything a Church Needs to Know About Workers' Compensation Coverage
For many years, the question of whether churches should be required to carry workers’ compensation insurance has been a controversial one.
The debate generally pits those who feel churches should be exempt from such requirements because they are non-profits and their employees may be volunteers against those who think that all employers, regardless of type, should provide coverage for their employees.
There are arguments to be made on both sides of the issue, but ultimately the decision comes down to state requirements for churches.
What is Workers' Compensation Insurance for Churches?
Workers’ Compensation Insurance provides coverage for wage replacement, medical, vocational rehabilitation, and other associated costs in the event of an employee injury or illness.
It is a legal requirement in most states that churches provide workers’ compensation coverage for their employees. This no-fault approach ensures financial compensation and medical care for employees injured while working, relieving employers of liability from lawsuits involving negligence.
Workers’ Compensation Insurance can provide churches with the necessary funds to pay for costs such as first aid treatments, hospital services, medical supplies, and medications. Additionally, workers may be eligible for wage replacement during periods of total or partial disability due to work-related injuries or illnesses.
Are Churches Required to Carry Workers' Comp Insurance?
A church with a W2 employee, such as a Pastor or secretary, must buy workers’ compensation insurance in most states. Some states may not require a nonprofit organization to obtain workers’ compensation insurance for employers unless they have five or more employees.
In states like California, workers’ compensation requirements make it nearly impossible to classify a church employee as an independent contractor to avoid workers’ comp coverage.
Many churches attempt to navigate around obtaining workers’ compensation insurance as part of their church insurance program to cut costs. Churches not covered by workers’ compensation insurance are potentially responsible for the total costs of an injured employee.
If your church is required to carry workers’ compensation insurance Integrity Now Insurance Brokers can assist in obtaining workers comp policies for religious organizations.
What are the Benefits of Having Workers' Compensation Insurance For Churches?
1. Protection Against Employer Liability for Injuries to Employees
Workers’ compensation insurance can protect churches against employee liability for injuries. This is because the insurance provides coverage for medical care, lost wages, and other damages related to work-related injuries or illnesses.
By having workers’ compensation insurance, churches can avoid potentially costly lawsuits from injured employees and have peace of mind knowing that their workers are being taken care of in case of an accident or injury.
2. Employers Liability Insurance Compensation for Injury or Death Caused by Work
Workers’ compensation insurance covers medical expenses, rehabilitation services, cash benefits for temporary or permanent disability, lump sum payments for scheduled injuries such as the loss of an eye or hand, and survivorship benefits for fatal injuries, including burial allowance and partial replacement of a deceased worker’s weekly wages. Additionally, it provides an avenue for prompt payment of benefits and fair adjudication of disputes between employers and employees.
3. Ability to File a Claim Without Going to Court
The church, as an employer, must have workers’ compensation insurance to protect employees who are injured on the job. If a church employee gets hurt on the job, he or she can file a claim with the state workers’ compensation system for prompt payment of benefits and fair adjudication of disputes.
As workers’ compensation insurance coverage is mandatory throughout the US, your church policies that protect your religious institution should include workers’ compensation benefits. This will ensure your church staff can file a claim when an unexpected accident occurs.
4. Access to Medical Coverage and Benefits
Having workers’ compensation insurance for churches helps provide access to medical coverage and benefits for church employees. This ensures that workers are covered in the event of an injury or illness, giving peace of mind to both the employee and employer.
Health insurance companies exclude work-related accidents and do not cover lost wages.
5. Protection from Claims Made by Employees
Having workers’ compensation insurance for churches protects churches from claims made by employees because it provides prompt payment of benefits and fair adjudication of disputes.
6. Reduced Stress and Anxiety from Litigation
Having workers’ compensation insurance can help reduce stress and anxiety from litigation because it protects from most lawsuits brought by an employee due to a work-related illness or injury.
7. Increased Safety and Workplace Safety Programs
By having workers’ compensation insurance for churches, organizations are encouraged by the church insurance company to take a preventive approach to minimize their potential liabilities, such as by implementing safety standards and protocols and providing signs to indicate potentially dangerous situations.
8. Ability to Plan Ahead for Potential Claims
Workers’ compensation insurance can help churches plan for potential claims and protect your church against financial losses if an employee is injured.
What are the Steps to Obtain Workers' Compensation Insurance For Churches?
Step 1: Determine if you are required to carry worker’s compensation insurance
While workers’ compensation insurance coverage is optional in some states based on the number of employees, it is critical to determine if your nonprofit organization must carry this insurance. Talk with one of our church insurance agents to find out if your state may require coverage.
Step 2: Obtain an application for a workers’ compensation insurance policy
As a licensed insurance agency that specializes in churches insurance, we will take the appropriate applications and obtain multiple church insurance quotes to find the best price and church insurance coverage.
Step 3: Have the policy reviewed and approved
Once you receive your workers’ compensation insurance quotes, our church insurance agents will review the policy for accuracy and the workers’ compensation premiums.
Step 4: Start the coverage immediately
Churches must start workers’ compensation insurance immediately when hiring new employees. Without coverage, employers are liable for any injuries their employees sustain on the job, including medical expenses and lost wages. By not having workers’ compensation insurance, a church could be held financially responsible for any accidents on its property.
Step 5: Annual Workers’ Compensation Policy Payroll Audits
At the end of the policy term, the workers’ compensation company will want to know a list of your full-time or part-time employees and the associated payroll. The employer is required to provide payroll reports to the insurance company.
Employers may be required to pay an additional premium for additional payroll not reported initially at the beginning of the year. When you purchase workers’ compensation insurance, it is critical to developing a realistic payroll estimate for your regular employees.
What Additional Church Insurance Coverage Do Churches Need?
1. Church Building Insurance
Church building insurance is a type of property insurance that covers the church’s buildings, contents, and other assets. It can help protect against losses from natural disasters such as hurricanes, fires, theft, or vandalism. Church building insurance typically includes coverage for the replacement cost of the insured property if it needs to be rebuilt after a loss occurs.
2. Liability Insurance for Churches
Liability insurance is a type of coverage that protects against third-party claims for bodily injury, property damage, personal injury, and advertising injury. It covers employees, officials, staff members, volunteers, and church members.
3. Business Property Insurance
Business property insurance is a type of insurance that protects businesses from losses caused by burglary, vandalism, theft, or acts of nature. Churches need business property insurance to protect their assets against any covered losses that may occur.
4. Directors and Officers insurance for churches
Directors and Officers insurance (D&O) is an insurance policy that covers the directors, officers, and members of a corporation against liability claims related to their duties. It protects them from legal costs associated with defending themselves against lawsuits.
5. Umbrella Policy
An umbrella policy is a type of liability insurance that provides additional coverage above and beyond the primary policies. Churches must have an umbrella policy because it can help protect them against significant financial losses in case of a lawsuit or other claims related to accidents or property damage.
6. Sexual Abuse Liability Insurance
Sexual abuse liability insurance covers the cost of legal fees, settlements, and other expenses associated with defending against or paying out damages related to sexual abuse allegations.
7. Religious Expressions Insurance
Religious Expression Insurance protects religious organizations based on their long-held religious beliefs. Coverage provides up to $1,000,000 in liability protection for churches and religious institutions.
8. Group Health Insurance
Group health insurance is a type of health insurance offed by employers that cover the medical expenses of an entire group or organization, such as a church. It protects against the costs associated with medical services such as doctor visits, prescriptions, hospital stays, and surgeries.
Churches need group health insurance because it helps them manage their healthcare costs while ensuring that their employees are covered in case of an accident or illness.
9. Flood Insurance for Churches Buildings
Churches need to have flood insurance to protect their buildings against potential losses caused by flooding. Flooding can lead to severe financial losses for churches, including damage to church property, loss of revenue due to the inability of the church building to remain open, and legal costs associated with filing claims for damages.
Church property insurance typically does not cover losses resulting from flooding, so churches should purchase additional flood insurance coverage to protect themselves from these types of unforeseen events.
10. Earthquake Insurance for Churches
Earthquake insurance for churches is crucial because it helps to protect the organization from potential financial losses caused by natural disasters such as earthquakes. This type of insurance can help to minimize possible losses in case of an earthquake, such as damage to buildings and property, legal fees associated with lawsuits filed by injured parties, and costs related to replacing damaged items.
11. Church Auto Insurance
Church auto insurance protects churches from financial losses due to accidents involving church-owned vehicles or vehicles used for church business purposes. It protects against third-party claims for bodily injury, property damage, personal injury, and advertising injury.
12. Employment Practices Liability Insurance for Religious organizations
Employment Practices Liability Insurance protects religious organizations from claims arising from wrongful termination, discrimination, sexual harassment, and other employment-related issues. This type of insurance provides financial protection if a lawsuit is brought against the organization due to an employee’s actions or inactions.
13. Employee Benefits Liability Insurance
Employee Benefits Liability Insurance protects churches if their employee benefits plans, such as health and retirement plans, are mismanaged or mishandled by a third-party administrator or provider. This type of insurance covers costs associated with claims against the business due to errors in benefits administration.
This can include financial losses from mistakes in calculating benefits, providing incorrect information about plan features, or failing to comply with federal and state laws and regulations.
14. Unemployment Benefits
Not all churches are required to carry workers’ compensation coverage or provide unemployment benefits to their employees. While this may save the church money for not having to pay unemployment premiums, this impacts your employees if they find themselves out of a job.
Church leaders should consider talking with one of our licensed insurance consultants specializing in church insurance to review your church insurance policies.
Importance of Working with a Licensed Church Insurance Agent
Working with a licensed church insurance agent is essential because it ensures that your church is adequately covered for all of the risks it faces. Our licensed agents at Integrity Now Insurance Brokers will be able to provide you with the right type of coverage for your specific needs, as well as advise you on how to protect yourself from potential losses best.
Additionally, working with an insurance agent specializing in liability insurance for churches ensures that you receive advice from someone with the knowledge and expertise to advise churches on their insurance coverage properly.
Frequently Asked Questions
What is the coverage offered by Workers’ Compensation Insurance?
Workers’ compensation coverage typically includes various types of benefits such as payment for medical bills and rehabilitation services; cash benefits if an employee is temporarily or permanently disabled and unable to work; lump sum payments for scheduled injuries such as the loss of an eye, foot, or hand; and survivorship benefits for fatal injuries including a burial allowance and partial replacement of a deceased worker’s weekly wages.
What are the eligibility requirements for Workers’ Compensation Insurance?
The eligibility requirements for Workers’ Compensation Insurance are as follows:
- Employers with one or more part-time or full-time employees are eligible for workers’ compensation insurance.
- Those subject to providing workers’ compensation insurance for their employees must go through a church insurance broker to gain access to the insurance carrier.
- Applicants must meet specific coverage requirements to qualify for the lowest church insurance rates.
How much does Workers’ Compensation Insurance cost?
Workers’ compensation insurance costs vary by city, county, state, and coverage limits. The amount of payroll and employee classification will also impact the overall cost of insurance.
What are the risks associated with not having Workers’ Compensation Insurance?
Not having Workers’ Compensation Insurance can lead to severe fines, a heavy lawsuit, or even criminal charges. Businesses that fail to carry compulsory workers’ compensation insurance could be held liable for damages related to an employee’s injury or illness.
This could include medical care costs, lost wages, and other expenses associated with the injury.
Who is required to carry workers comp in South Carolina?
In South Carolina, employers with four or more employees must carry workers’ compensation insurance. This includes part-time, full-time, and seasonal employees.
Who is required to have workers comp in Georgia?
In Georgia, employers must have workers’ comp insurance if they have three or more employees. This includes full-time and part-time employees, domestic help, and agricultural labor. Workers comp must also be provided to all independent contractors working on a project worth more than $2,500 and involves manual labor.
Additionally, any employee who is classified as exempt under the Fair Labor Standards Act (FLSA) must be covered by workers comp. Employers in Georgia are responsible for providing this coverage and ensuring that their employees are adequately compensated for injuries suffered while on the job. Failure to do so can result in serious legal consequences and financial penalties.
Are churches exempt from workers’ compensation insurance coverage in Florida?
Employers located in Florida are not required to offer workers’ compensation insurance if they have fewer than four employees. However, they are obligated to pay medical expenses for work-related injuries.
Who is required to carry workers comp in NC?
In North Carolina, employers with three or more employees must carry workers’ compensation insurance. Companies that do not have three or more employees can still choose to purchase this type of insurance to cover their employees in the event of an injury while on the job.
Employers must also provide workers’ compensation coverage for independent contractors if they are deemed “employees” under North Carolina law.
Additionally, all employers must post a notice informing their workers that workers’ compensation insurance covers them in case of an on-the-job injury.
Do churches need to require subcontractors to carry workers’ comp insurance?
Yes, churches should require subcontractors to carry workers’ comp insurance. This critical safety measure can help protect the subcontractor and the church from potential legal liabilities.
Churches that fail to obtain proof of workers’ compensation insurance from a subcontractor or vendor will be required to cover the workers’ compensation costs at the audit time. This includes janitorial companies, lawn care companies, and more.
What is Employers Liability Insurance?
Employers Liability Insurance is a secondary policy included under the workers’ compensation policy. It protects churches from the financial burden of legal liabilities should an employee become injured or ill due to their work.
Talk With A Church Insurance Expert
Integrity Now Insurance Brokers is an excellent resource for anyone who is looking for church insurance. Their team of experts is highly knowledgeable and experienced in providing insurance coverage for churches, so you can be sure that you’re in good hands when you talk to them.
They’ll be able to answer any questions you have about the different types of insurance and provide you with the best advice on how to protect your church from potential legal issues or financial problems.
So if you require church insurance, don’t hesitate to contact Integrity Now Insurance Brokers and talk with one of their experienced professionals today.