Is your Church or Institution Insured?

Don't neglect this advice.

J.W. Peeke, Secretory and Manager, Insurance Department, General Confence

The General Conference In­surance Service was organ­ized in 1936 under the direc­tion of W. A. Benjamin, who successfully managed this growing and expanding de­partment until his retirement in July, 1955. He remains one of our valued insurance counselors. V. L. Sanders managed the department from August, 1955, to May, 1957. Upon his resignation J. W. Peeke became the m'an­ager of the department. Today there are nine men and fourteen women in the office in Washington, D.C., and two men and four women in the office in La Sierra, Califor­nia.

Our aim is to be of the greatest service to our denominational administrators in the implementation of their insurance pro­gram. This is done by appraisal and survey service, distributing our "Insurance High­lights" bulletins, holding insurance semi­nars, and properly settling loss claims as well as counseling on the need for adequate insurance coverage.

It is emphasized in the counseling serv­ice that adequate denominational insur­ance means:

  1. The ability to rehabilitate or recon­struct damaged or destroyed buildings.
  2. The ability to pay sizable liability ver­dicts to injured persons or for property damage of others.
  3. The ability to reimburse a substantial burglary or fidelity loss.
  4. The ability to reimburse workers by means of Workmen's Compensation in case of accidental injury or death while in the course of employment.

In order to determine what is adequate. insurance on our denominational proper­ties, our insurance department offers ap­praisal and survey service. One of our specially trained men visits the larger in­stitutions and other denominational prop­erties for property appraisal and fire in­spection. He passes this information to the insurance department underwriter who services the particular organization, and the underwriter then not only makes recommendations for the amount of in­surance needed but also points out the steps to be taken for fire prevention and to safeguard lives.

The purpose of the "Insurance High­lights" bulletins is to assist our denominational administrators in understanding the technical points of adequate denomina­tional property protection. Anyone who is not on our mailing list and who would like to receive our bulletins may do so by con­tacting one of our two offices. We will send you copies of all back issues and include your name on the list for future ones.

It has been repeatedly observed that ap­praisals of denominational properties re­veal shortages of substantial proportions in the amount of fire and extended cover­age in force. Reported data on fire losses indicate that a large number of our schools, churches, and institutions were underinsured.

This inadequate coverage of insurable values may be attributed to a number of factors. Sometimes it is the result of neglect on the part of management or a lack of in­terest in the insurance program—a failure to foresee the consequences that would re­sult and to take steps to prevent them. On the part of some it may be due to the press of seemingly more urgent and important business problems.

One of the greatest causes of underin­surance is the failure of an administrator to realize the impact of inflation on con­struction costs. The failure to adjust in­surance to present-day replacement values is of far greater danger now than in pre-inflationary periods. Another cause of un­derinsurance is the failure to take into con­sideration the value of the voluntary labor contributed toward the cost of con­struction of a church building. Every de­nominational administrator who adopts a complacent view toward an insurance pro­gram based on original acquisition values or outdated appraisal values is not only neglecting a moral obligation but is jeop­ardizing his personal integrity and repu­tation.

Although an adequate amount of insurance gives our denominational adminis­trators a sense of security and permanence, and guarantees the continuity of the insti­tution, there is also a need for precaution against losses. A careful analysis will dis­close the amount and type of insurance needed to meet specific perils, and a sur­vey is essential to help determine the in­surance needs. However, this is of little value unless every possible precaution is taken to prevent losses of all kinds. In spite of all the care taken, losses cannot be completely prevented, though they can be minimized by taking proper safety meas­ures.

Often church furnaces are taxed to capacity because a moderate, average temperature is not maintained throughout the week. This may result in overheated flues and chimney fires. The furnace or boiler rooms should be properly enclosed with fire-resistive partitions and ceilings, and the entrance protected by an approved self-closing fire door. Proper containers should be provided for trash; and with coal furnaces, ashes should be put in metal con­tainers only—at no time should they be piled on the floor. The furnace should be inspected and kept in proper operating condition, and adequate insulation should also be required.

Chimneys and smokepipes should be in­spected, and cleaned if necessary, at least once a year, preferably before using the furnace in the fall. In older churches it is well to check for defects in the masonry work, particularly where the chimney is not protected with a flue lining.

All electrical wiring in the church should be checked by a competent electrician who is familiar with the National Electrical Code. If a portion of the church building is used for recitals or other programs where footlights or side lights are required, it is important that such installations be made by qualified electricians; all temporary wir­ing should be checked to make sure that no circuit is overloaded. All fuses must be of the size specified by the electrician.

Lightning-rod protection should be in­stalled on the building, especially on the church steeple, in accordance with the "Code for Protection Against Lightning," published by the National Fire Protection Association and the National Bureau of Standards. (Address available upon re­quest.)

If the church is equipped with a kitchen, it must be kept clean. Cooking ranges should be installed, away from all wood­work and other combustible materials. A hood above the range should be provided and vented to the outside through a duct with adequate clearance from combustible materials.

Flammable liquids such as paints, var­nishes, and cleaning solvents should be kept in metal cabinets or boxes, and self-closing metal receptacles should be provided for any oily rags or waste.

Approved fire extinguishers in the fur­nace room and in the kitchen are a must. Expert advice should be obtained from your fire department regarding the place­ment, type, and number of extinguishers that will be needed.

Adequate exits clearly marked with signs and lights are essential. Doors should open outward and be equipped with panic hardware; otherwise they must be left unlocked during the time the building is occupied. A safe, usable condition free from ob­structions must characterize all exit ways, and battery-powered emergency lights should be provided for exit areas in the event of a power failure.

Everyone concerned with the church operation should know the location of the nearest fire alarm and how to operate it, and some responsible person should be as­signed the job of turning in an alarm in case of fire. This person's duty is to remain at the box location to direct the fire de­partment.

All draperies and other decorations used at any time in any part of the church should be properly flameproofed and pro­tected from anything which could possibly ignite them.

It is essential that floors, stairs, and aisles have a smooth, non-slippery surface, un­littered and free of obstruction. Repair of loose boards, bricks, or tiles must not be delayed, and the use of slippery mats or loose rugs must be prohibited. Well-lighted stairways with rigid and sufficiently strong banisters having no sharp projections or splinters are a must. The tread and risers on stairs should be uniform since risers of uneven heights and treads of uneven width tend to destroy the rhythm established in climbing or descending stairs and can thereby cause tripping. For safety's sake, steps in dark locations should be outlined in white paint. The necessity for adequately strong and high guard rails for balconies cannot be overemphasized.

To prevent explosions it is recommended that boilers be provided with pressure re­lief valves, water level gauges, and low water alarms. It is essential that hot water tanks be provided with both pressure and temperature relief valves. Regular inspec­tion by a qualified person for cracks, cor­rosion, embrittlement, and operation of emergency equipment is also a necessity. Air conditioning systems should provide for the intake of safe, pure air.

The local fire department should be re­quested to inspect the church property reg­ularly, and the church custodian's duty must also include regular, frequent inspec­tions of the church building. Two helpful check lists are available from the General Conference Insurance Service. These serve as guides by indicating what to look for in the regular inspection of the church.

Unfortunately, even with the best loss prevention program, losses occur. Financial hardships occasioned by unforeseen prop­erty damage and injury to persons can be avoided by proper insurance coverage. Most ministers and administrators of church properties are keenly aware of the importance of insurance, but they find it impossible to keep fully informed regard­ing the latest trends and coverages avail­able. Thus a planned program needs to be developed. Changes are constantly being made, either in the insurance business or in the activities of the church; therefore, it is highly recommended that the denomina­tional administrators or pastors secure the help of the General Conference insurance counselors in planning the best insurance program for their church property. What may have been an ideal insurance pro­gram a year or two ago may be very much out of date today.

It is recommended that vandalism and malicious mischief coverage be included in addition to fire and extended coverage pro­tection. In determining the amount of in­surance needed for sufficient protection it is most important to have an accurate valu­ation of the actual cash value of the prop­erty.

Valuable paintings, pictures, stained glass windows of value, and other objects of artistic or historic value may be covered separately under an all-risk fine arts policy.

Equipment such as motion picture pro­jectors, tape recorders, and similar items owned by the church may be covered under a special policy to protect them against loss or damage while in or away from the church and while in transit.

In this day when people do not hesitate to sue a charitable institution or church, it is imperative to have public liability insur­ance which affords protection against suits or claims arising out of accidents occurring on the premises, or away from the premises if such accidents are the result of a normal church activity. It is recommended that the insurance should be provided by the broad­est form of contract—the Comprehensive General Liability policy.

All churches need nonownership liabil­ity or hired automobile liability to cover autos operated for the benefit of the church in connection with its many home mis­sionary activities. These coverages, plus the basic policy, protect the church—within the limits of the policy—against bodily in­jury and property damage claims arising out of the ownership, maintenance, or use of any motor vehicle, whether hired, owned, borrowed, or used on behalf of the church.

Liability policies respond when the church is legally liable, and usually negli­gence is involved. However, there are times when church members are asked to per­form specific jobs for the church for which they receive no remuneration. Sometimes injuries occur while the members are per­forming these acts of voluntary labor and medical expenses are incurred. There is a special type of insurance to reimburse church members for these medical expenses and this coverage can be purchased by the conference on a conference-wide member­ship basis.

The benefits of the Voluntary Labor Ac­cident Policy are as follows:

  1. Blanket Medical Expenses
  2. Death Benefit Rider
  3. Dismemberment Benefit
  4. Weekly Indemnity (maximum 52 weeks)

Persons eligible for this coverage are de­fined as all persons performing voluntary labor for a member church within the local Seventh-day Adventist conference, pro­vided such person is authorized by the lo­cal pastor or a denominationally con­ference employed individual, or the head elder of the local church. The Weekly In­demnity benefit does not apply to an in­sured person unless he is engaged in a full-time gainful occupation and only to persons whose average earnings exceed by at least 25 per cent the indemnity for loss of time under all policies covering the per­son.

Church burglary and theft insurance is coming to be recognized as necessary to protect the funds and property of the church. In some instances fidelity bonds might be desirable.

Comprehensive glass insurance covers replacement of broken glass or glass dam­aged by acid or chemicals.

Heating boilers, hot water heaters and tanks, involve hazards that must be seri­ously considered, since these devices can explode with extreme violence. The boiler and machinery policy protects against dam­age to the property of the insured, in­cluding the insured equipment, expedit­ing expenses, property damage liability, and bodily injury liability, resulting from boiler and machinery accidents. Periodic inspection of the insured equipment helps to keep it in top-notch condition.

If your church does not have the com­plete protection it needs, and you wish to plan a better insurance program, our counselors will be happy to work with you. Send your request through your local con­ference treasurer and it will be given care­ful consideration.

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J.W. Peeke, Secretory and Manager, Insurance Department, General Confence

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