I remember the first time I got church insurance.  There were all of these coverages and I had no clue what they meant.  The next few legal Wednesdays will try and clear the muddy insurance waters for you.  Employment Practices Liability Insurance (EPLI) covers the church if there is an accusation of discrimination, sexual harassment, or wrongful termination.  This insurance doesn’t cover members, but as it suggests it covers claims that violate employees’ civil rights or their ability to perform their jobs in an acceptable and fair working environment.  The premium is largely based on the number of employees the church has.

You will see two numbers often quoted with EPLI.  The first is a limit.  The limit simply means how much the insurance company will cover if you have a claim.  As a new church, this number can be low.  I usually suggest $100,000 for a small staff.  The second is a retention.  Think deductible.  This is the amount you have to first pay before the insurance company starts kicking in funds.  The higher the retention the lower the premium.  It’s normal to have a retention of $5,000.

Do you need it?  If you are the only one on staff then no.  If you start hiring other’s then yes.  It’s typically a small amount of your annual premium and worth having it in place.  Everyone always says, but this is a church we won’t get mad at each and so and so would never sue even if we did have a problem.  But things happen sadly.  Better to be insured for a “probably won’t happen” event then have to go bankrupt over an “I can’t believe that happened” event.

To see more details on EPLI, check out the blog of Illini Community Insurance.

*For those of you paying attention: yes I realize it’s not Wednesday.  I got busy yesterday.