Builder's risk insurance and workers' compensation coverage are essential during a construction project. Before your church or ministry starts a building project, you need to understand and manage the additional risks and responsibilities created by this work. Your ministry should obtain special insurance to cover the construction project, plus make sure your contractors have insurance of their own. Brotherhood Mutual's underwriting team recommends that you investigate four key areas:
- Obtain Builder's Risk Insurance. Standard church insurance policies don't cover new construction. Before a project begins, either you or the contractor must purchase builder's risk coverage to insure the new building or addition during the construction phase. Clarify in writing who's responsible for insuring the building while it's being constructed. After the project is completed or occupancy begins, you'll want to cancel the builder's risk coverage and endorse the building onto your policy.
- Require a Certificate of Insurance. Before your contractor begins work, ask his company to provide you with a certificate of insurance. This document verifies that an organization has appropriate coverage. The certificate should indicate that the contractor has workers' compensation, general liability and automobile insurance in force. The contractor should carry liability limits of at least $1 million. Ask the contractor to name your organization as an additional insured on the liability certificate of insurance. If the contractor is providing builder's risk coverage, ask him to indicate it on the property certificate of insurance. Obtain your builder's risk policy for your records.
- Look for Indemnification Clause. Check the construction contract for references to indemnification—making compensation for injury, loss or damage covered by insurance. Make sure the contractor will indemnify, defend and hold you harmless. If there is no such reference in the contract, ask to have it included.
- Carry Workers' Compensation Insurance. Either you or the contractor must provide workers' compensation coverage to protect the paid laborers performing construction work. If you hire a subcontractor who doesn't carry workers' compensation insurance, your state's laws may hold you responsible for work-related injuries to the contractor's employees. Never use uninsured subcontractors. If you do, you could be billed a substantial amount of additional premium for the workers' compensation exposure. When using volunteer or donated labor, determine whether your insurance program provides workers' compensation insurance. Many plans do not. Some provide only limited medical benefits for volunteers providing donated labor. Volunteers need to know that after primary medical coverage is exhausted, they will be responsible for their own medical expenses if they're injured.
Explore this expense of providing workers' compensation insurance before deciding to undertake the work yourself. Often, after this premium is factored in, a church finds it is not cost-effective to complete the construction itself. —Used by permission
Get Spirit-filled content delivered right to your inbox! Click here to subscribe to our newsletter.
Dr. Steve Greene is now sharing stories, teachings, and conversations with guests who lead with love on Love Leads, a new podcast. Listen now.
Dr. Mark Rutland's
National Institute of Christian Leadership (NICL)
The NICL is one of the top leadership training programs in the U.S. taught by Dr. Mark Rutland. If you're the type of leader that likes to have total control over every aspect of your ministry and your future success, the NICL is right for you!
FREE NICL MINI-COURSE - Enroll for 3-hours of training from Dr. Rutland's full leadership course. Experience the NICL and decide if this training is right for you and your team.Do you feel stuck? Do you feel like you’re not growing? Do you need help from an expert in leadership? There is no other leadership training like the NICL. Gain the leadership skills and confidence you need to lead your church, business or ministry. Get ready to accomplish all of your God-given dreams. CLICK HERE for NICL training dates and details.
The NICL Online is an option for any leader with time or schedule constraints. It's also for leaders who want to expedite their training to receive advanced standing for Master Level credit hours. Work through Dr. Rutland's full training from the comfort of your home or ministry at your pace. Learn more about NICL Online. Learn more about NICL Online.