Mosque / Places of Worship
Covers which are available for Places of Worship are provided below, and each is optional to suit the individual need of each Place of Worship and their requirements;
Policies usually offer cover on a fire and special perils basis with accidental damage and/or subsidence as optional extensions rather than part of the standard cover.
Damage caused by terrorism can also be included at an additional premium.
Theft cover requires careful consideration as discussed below under key headings.
Places of Worship premises, whilst unattended, are often open to the public and so theft cover is generally not subject to the customary commercial insurance requirement for violent and/or forcible entry or/exit to the premises. Theft of contents from outbuildings may, however, be excluded unless the outbuildings are locked when left unattended.
Similarly the insurance cover can be extended to include property in the open, subject to a limit any one claim.
Individual contents items may be of relatively high value. A limit any one item may apply in respect of the contents. This any one item limit may apply to all types of claims (not just theft losses) particularly in relation to sculptures and monuments.
The buildings and its fixtures may be attractive to thieves.
Market prices for metals, particularly non-ferrous metals such as lead and copper, have increased considerably in the recent times. In particular church buildings often contain such metals insurers may restrict the extent of insurance cover for theft of external metal:
- to a maximum amount
- subject to SmartWater (a unique forensic solution) being applied and registered, or
- excluding theft unless SmartWater is utilised.
Theft of parts of the building or its fixtures (including external metal such as lead) may be excluded when scaffolding is erected at the premises. Some policies, however, restrict the operation of this exclusion to external metals only.
An inner limit may also be applied in respect of theft damage to the buildings.
Minimum security requirements and if appropriate, a burglar alarm condition are, likely to apply to the premises and as they will be conditions precedent to liability should be strictly adhered to.
Theft by employees is typically excluded but cover may be available under a separate 'staff dishonesty'/'fidelity guarantee' section.
Places of Worship often contain special glass and care is needed in assessing an adequate sum insured for its replacement. In order to protect such glass policies often contain a windows protection warranty.
This is likely to require that external windows containing stained glass, grisaille (a method of painting that uses shades of grey), figured glass or etched glass are externally protected by polycarbonate sheeting (a strong synthetic resin used in 'unbreakable' windows) or stainless steel grilles which entirely cover the windows.
Headstones and Memorials
Headstones are the property of the deceased's relatives but policies may, if it is not recoverable from the headstone owners, cover the cost of making good such items which are damaged by an insured peril and thereby rendered dangerous.
FURTHER COVERS – PROPERTY DAMAGE
Here we will look more in-depth at the property damage insurance consideration of Places of Worship.
Whilst many standard commercial insurance policies cover capital additions or alterations to buildings, church policies often go further and provide cover for 'bequeathed property'. The extension covers contents as well as buildings but specifically excludes road vehicles, watercraft, aircraft and money.
Cover is provided for up to three months from the date the insured has legal title to the property and is subject to separate limits for any one bequest in respect of buildings, any other property and any single article .
Property Away from the Premises
As with any organisation, it is likely that property will be removed from the Place of Worship premises. Cover will be required for such items as communion plates (including crosses, candlesticks, vases, alms dishes, altar cloths, frontals and eucharistic vestments/robes), office equipment, musical instruments and/or other portable items.
Some policies can be extended to include the insurance requirements under a building contract relating to any new works or existing premises and also the additional liability that may arise under the Construction (Design and Management) Regulations 2007.
Insurers require to be notified of all the relevant information before agreeing to the terms and extent of insurance cover.
Infrequently Used Places of Worship
Not all Places of Worship are used regularly and where cover is provided for a place of worship that is used only infrequently, often defined as 'less than once a calendar month', cover may be restricted to fire, lightning, explosion, earthquake, aircraft, riot, flood and damage by falling trees.
Empty and/or disused premises may be subject to even more restrictive terms and underwriters will require full details of the security precautions at the premises and the long-term intentions for the premises.
Costs may be imposed by the local authority following an insured loss, to comply with the appropriate listed buildings or conservation legislation or requirement by the appropriate official body. The insurance cover will include the payment of these costs, up to specified limits.
FURTHER COVERS – LOSS OF BUSINESS/MONEY
Imagine a major fire with resulting serious property damage and you can begin to see how a place of worship might incur consequential losses. Due to fact that the premises are so damaged services cannot take place, income from service collections and hiring out of the premises to other organisations is lost.
The business interruption cover provided by a place of worship insurance policy generally follows the perils insured under the property damage section. The usual proviso applies, that property damage insurance must be in force, and effective in order for a business interruption claim to be admitted.
Business interruption cover for places of worship is arranged on a 'loss of income' basis as the place of worship is a non-profit making organisation.
However, the place of worships’ main concern may be to maintain its usual activities, possibly at a different location, until normal services may be resumed. The policy will pay extra expenses that the church incurs in order to minimise the interruption of its normal activities.
It will also pay professional accountant's charges in preparing information to support the business interruption claim.
Due to the age of many places of worship the policy may extend to cover any additional reduction in income or increase in costs of an archaeological dig arising from discoveries made as a result of the insured damage. This additional cover is provided within the overall limit.
In common with standard commercial property combined policies the business interruption section may include business interruption arising from:
- denial of access to the premises as a result of damage by the insured perils to neighbouring property
- failure of the public utilities (gas, electricity, water and telephones) due to the insured perils at the utilities premises
- murder and suicide at the insured premises
- restrictions on the use of the premises by the order of or on the advice of the local authority due to the discovery of vermin or pests at the insured premises
- outbreaks of specified diseases in the vicinity of the place of worship, usually limited to a specified radius (typically 25 miles)
Further, some policies extend to cover loss of income or increased costs arising from insured damage at any premises within the British Isles where the place of worship is holding a fund raising event, exhibition or other activity, subject to an inner limit (for example, £10,000 any one claim).
Loss of Money
The loss of money cover for places of worship is similar to the standard commercial combined policies but the points below should be considered.
- there will be a specified limit, in respect of money at the home of a place of worship official.
- fund raising events may require increased money limits. Policies typically contain clauses which double the money limits for the period from 2 days before the fund-raising event to 7 days after.
FURTHER COVERS - LIABILITY
Public and Employers Liability
Places of Worship will generally require employers', public and products liability insurance in the same way as any other organisation.
With places of worship, however, many of the activities are carried out by volunteers rather than actual employees and the way that insurers treat volunteers does differ.
Some policies include 'authorised volunteers' within the definition of employees meaning that legal liability for injury to an authorised volunteer falls under the employers' liability section limit of indemnity of £10 million (£5 million in respect of terrorism claims).
Other policies do not treat volunteers as employees but as third parties and therefore, legal liability for injury to a volunteer falls under the public liability section, which may be subject to a lower limit of indemnity, typically £5 million.
It should be remembered that as employers' liability insurance is a compulsory requirement, it is subject to fewer exclusions and conditions than public liability insurance.
Regardless of how legal liability for injuries to volunteers is dealt with the policy should, at the request of the place of worship, indemnify the authorised volunteers for claims made against them for legal liability in respect of accidental injury to third party persons or accidental damage to third party property arising in connection with church business and activities.
If volunteers are not defined as employees then volunteers must be included under an indemnity to others clause, similar to an indemnity to principals clause.
Employers', public and products liability insurances cover legal liability for the damages (compensation) payable to the claimant and any of the claimant's legal costs awarded against the insured together with the insured's own defence costs.
Place of worship combined policies normally consider the payment of these legal costs differently under both liability sections of the policy. Both claimants' costs and insured's costs are normally included within the employers’ liability limit of indemnity, but are usually paid in addition to the public/products liability limit of indemnity.
The cover for legal costs should also extend to include those costs in connection with the Corporate Manslaughter and Corporate Homicide Act 2007.
The public liability section will cover:
- the premises risk - to cover legal liability arising out of people attending the place of worship whether for the services or visiting the premises for other purposes.
- the work away risk - to cover fund raising events such as picnics, family days and bonfire nights and the clergy and volunteers' activities whilst out in the community.
Products liability will provide cover against legal liability arising out of the provision of food and drink or the sale of any items that may be sold or supplied, for example books, postcards other souvenirs and second-hand goods at jumble sales/fairs.
Places of worship deal with young and/or disadvantaged people. It is therefore unfortunately necessary to check that legal liability arising out of abuse is not excluded.
Liability insurance provides indemnity against accidental injury. Abuse is seldom accidental and it may therefore be a matter of interpretation.
Indemnity to Hirer
It is usual for a place of worship to require any organisation using the premises to have effective public liability insurance in their own name, and for which they are responsible.
There should be a procedure in place to enable the place of worship to maintain a record of the current policy details for each of these organisations, including the insurer, the limit of indemnity, period of insurance, insured name and specific conditions included within the policy.
It is, however, possible for the place of worship to extend the public liability section of their policy to include ‘indemnity to private hirers’. If the policy contains this extension then, at the insured’s request, the policy will cover legal liability incurred by a hirer of the place of worship’s premises. It is only intended for private social events where the hirer is over the age of 18. A lower indemnity limit may apply to this extension.
The place of worship must use this extension with caution because any claim by the hirer could impact on the place of worship’s future premiums. It is in the place of worship’s best interests to request the hirer to make their own insurance arrangements.
Pastoral care can be defined as 'the use of counselling skills to provide free, informal, unstructured care and ministry relating to a particular concern of an individual seeking the help of the church'.
Guidelines for good practice have been published by various church organisations. The cover will not include the professional counselling risk unless it is specifically added upon payment of an additional premium.
Whilst this cover may be subject to the overall limit of indemnity for third party insurance of say, £5 million, it is likely to restrict indemnity in respect of financial loss claims not involving injury or damage to a lower figure such as £100,000.
This cover is written on a 'claims made' basis. The insured should, however, be aware that they are required to report any claims or circumstances likely to lead to a claim and not wait until an actual claim has been made against them.
Errors and Omissions
Public and products liability insurance provides cover for legal liabilities arising from injury to third parties, or damage to third party property. It does not cover liability for financial losses arising out of a breach of duty.
Some policies may extend to cover the risk of legal liability arising from errors and omissions resulting from the provision of services and facilities provided by the insured. An example would be the double-booking of two wedding ceremonies, at the same date and time. This extension will specifically exclude bodily injury or damage to property.
A reduced limit of indemnity will apply of say, £100,000 any one period of insurance and this is likely to be inclusive of all the claimant's and the insured's costs.
As is normally the case with errors and omission insurance this cover is written on a 'claims made' basis.
This extension is also on a 'claims made' basis and will indemnify the insured against claims for libel, slander, breach of copyright, registered design or trade mark. This could occur, for example as a result of the publication of any magazine, newsletter or other official publication.
The limit of indemnity will be similar to the errors and omissions indemnity limit, typically £100,000, costs inclusive, in the aggregate.
Bell ringers may exercise their skills at other churches than the insured premises and the policy should cover them not only whilst at the alternative church but in the course of transit there and back.
In order to avoid doubt insurers that do not treat volunteers as employees may specifically add bell ringers to the definition of employees.
FURTHER COVERS– TRUSTEES INDEMNITY
Under the provisions of the various Charities Acts , place of worship trustees may be held personally responsible, with unlimited liability, for any breach of duty on their part or that of their fellow trustees.
This insurance, written on a 'claims made' basis, will indemnify the trustees against their personal legal liability arising out of a wrongful act committed or attempted by a trustee when carrying out his or her duties as a trustee.
The Charities Act 2006 now provides a statutory authority for trustees to purchase trustees indemnity insurance out of the charity’s own resources, without the prior permission of the Charity Commission, so long as they are satisfied that it is in the best interests of the charity to do so and there is no provision in the charity’s governing document which specifically forbids the purchase.
There can be a wide variance in the cover provided by these trustee liability policies/extensions. Some of the points to check for are discussed here.
Who is covered under Trustees Indemnity
There is a need to consider the definition of trustees as this:
- should include ‘any trustee, officer, member or employee of the place of worship council’
- may include the place of worship council as an entity for its own liability rather than any indemnity the place of worship has granted to the individual trustee
- may include the spouse, legal estate, heirs or legal representatives of the trustee but only in respect of liability arising out of the trustee's wrongful acts as a trustee.
What is covered under Trustees Indemnity
When written as extensions to combined policies the cover can be significantly more restrictive. You will need to check whether the policy covers:
- claims arising from employment disputes. Some policies may restrict the cover to harassment and discrimination cases only
- the defence of manslaughter charges
- claims against the trustee brought by the place of worship council and/or another trustee
- the cost of restoring or replacing a damaged document relating to the business of the place of worship council
- the fidelity risk; the loss suffered by the place of worship itself arising from dishonest acts of a trustee. The policy should at the very least indemnify one trustee against legal liability arising out of the dishonesty of another trustee.
Further Covers Available – Legal Expenses, Personal Accident and Engineering Risks
In addition to the risks already considered for places of worship the following risks may be reviewed.
This is generally an optional cover which is often provided by a separate insurer within a combined policy wording. The risks covered can include:
- employment disputes - defence costs and compensation awards. The latter may not be payable if the instructions of the insurer's employment advice service have not been fully adhered to. This should extend to cover service occupancy risks. The policy will pay the costs involved in recovering possession of the church's premises (whether owned or leased) from an employee
- criminal defence costs - the cost of defending the breach of statutory regulations
- property disputes - cover for defence and pursuit of the insured's rights
- contractual disputes - cover for defence and pursuit of the insured's rights, subject to there being a minimum amount in dispute, for example, £250 - £1,000. The insured may be required to use the insurer's approved service for debt recoveries. This cover is not always automatically included and can have a significant effect on the overall cost of legal expenses insurance
- representation costs - for tax investigations and VAT disputes.
- Legal expenses insurance can include an element of duplicated cover with trustees' indemnity insurance but:
- trustees' indemnity insurance is designed to protect the individuals and permits separate legal representation
- the legal expenses sums insured is likely to be lower (£100,000) than a separate trustees' indemnity policy (minimum £250,000)
- the legal expenses insurance covers pursuit costs (suing a third party to protect the rights of the church or claim compensation on behalf of the church) and not just defence costs.
FURTHER COVERS - PERSONAL ACCIDENT
Combined policies restrict the accidents covered to those that occur whilst engaged in place of worship business or authorised activities but may extend the cover to a 24 hour basis in respect of the clergy.
The definition of insured persons should include employees, authorised volunteers, and members of the clergy and the place of worship.
The benefits that are payable are specified in the policy schedule.
Personal accident insurance does cover injuries suffered when the insured person is assaulted.
FURTHER COVERS - ENGINEERING RISKS
Whilst any statutory inspection service required will have to be arranged separately with a specialist provider an element of engineering insurance may be available as a part of a place of worship combined policy.
Sudden and unforeseen damage to water heating boilers, their connecting piping, radiators and calorifiers may also be covered.
Breakdown of boilers and organ blower motors, central heating pumps or motors may be a feature of combined policies. The policy may require such items to be specified on a schedule. Gradually developing flaws, wear and tear will be excluded.
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Mosque / Places of Worship
Places of worship such as churches and mosques can be the backbone of a local community – but they can also be at risk if they do not possess the correct insurance. Make sure you’re fully protected with one of our Places of Worship Insurance policies