Protect Your Board Against Lawsuits

Lawsuits against churches and ministries are on the rise, making their board members especially vulnerable. Sometimes, courts have found directors and officers personally liable when their actions have resulted in financial damages.

Consider these examples:

  • Providing inadequate bookkeeping or financial oversight.
  • Allowing personal motives to drive church-related decisions.
  • Failing to preserve tax-exempt status.

Even well-meaning actions could put the personal assets of board members at risk. However, by taking steps to limit liability, church and ministry boards can find stronger legal positions in which they can properly function.

Incorporate your ministry

If a church is incorporated, board members can gain the same legal protections that apply to board members in businesses. This protection comes with two requirements:

  • The Prudent Person Rule protects board members from personal liability for board actions or decisions unless a “reasonably prudent person” would have avoided such actions or decisions under the circumstances.
  • The Duty of Loyalty Rule says that a board member’s actions and decisions must be free of personal motives.

When incorporating, first contact an attorney who is familiar with not-for-profit laws in your state.

Include bylaw protection

If your bylaws do not include indemnification provisions, enlist the help of a local attorney to draft some. These provisions could prevent board members from having to pay out-of-pocket costs if they are sued in connection with their ministry work. Evaluate your bylaws regularly by appointing a task force to review the bylaws for necessary changes or additions.

Consider charitable immunity laws

Most states have charitable immunity laws that can protect volunteer workers—and potentially board members—from being sued in connection with their volunteer service. That immunity, however, is limited because the laws generally:

  • Protect volunteers only, not church organizations or employees.
  • Prevent certain people from suing.
  • Protect some—not all—activities.
  • Removal from a lawsuit requires that volunteers hire an attorney.

Charitable immunity laws are complicated and vary by state. Ask a local attorney to review applicable state and federal charitable immunity laws with you.

Insure your board members

Standard general liability insurance policies do not cover claims against directors or officers for financial damages resulting from their failure to perform their duties. Separate directors and officers coverage helps protect board members’ personal assets in the event of certain financial damages and lawsuits. It also covers financial damages that other parties undergo when leaders fail to perform their duties properly.

January 30, 2023
Brotherhood Mutual Foundation Kingdom Advancing Grant
Brotherhood Mutual Foundation Kingdom Advancing Grant
Tags: coverage, ministry, insurance
January 9, 2023
Better Achieve Your Mission in 2023
Better Achieve Your Mission in 2023
Tags: coverage, ministry, insurance
November 10, 2022
Evaluate Your Ministry's Fire Safety Plan
Evaluate Your Ministry's Fire Safety Plan

With the holiday season right around the corner, it’s wise for ministries to evaluate their fire safety plan. Whether your ministry is hosting a holiday party, prepping treats for charity, or running a community kitchen, make sure you’re well-prepared with these tips.

Tags: safety, coverage, ministry, volunteer safety, fire safety
September 9, 2022
School is Back in Session
School is Back in Session

As school is back in session, it’s important to make sure your school is equipped with the correct safety procedures. Thinking about your school’s physical security as a series of layers can help you find gaps in your plan. Transportation and volunteers are just two important aspects of your school safety plan to think about.

Tags: protect, safety, insurance, coverage, liability, ministry, child safety, volunteer safety, christian schools, back to school, transportation
July 15, 2022
Shepherding Ministries in a Time of Change
Shepherding Ministries in a Time of Change

Anyone who turns on the news, flips through a magazine, or browses the web can see that American society and culture are experiencing rapid transitions. Some ministries have valid concerns that issues surrounding societal shifts may expose them to negative publicity, governmental scrutiny, or litigation.

The questions become: when and how can ministries operate within their deeply held religious beliefs when they may conflict with others’ rights?

Tags: protect, safety, insurance, coverage, liability, ministry, religious freedom
May 19, 2022
Five Common Tricks of Cyber Scammers
Five Common Tricks of Cyber Scammers

Cyber security is increasingly crucial in our technologically advanced world. Scammers use many schemes when attempting to steal your data, but you can outsmart them by understanding their methods.

Tags: ministry, cyber security, technology, data, protection
July 22, 2021
Thousands in Relief Funding Available to Ministries Through the Employee Retention Credit
Thousands in Relief Funding Available to Ministries Through the Employee Retention Credit

Most ministry leaders don’t realize there is funding available to non-profit employers including churches, schools, colleges, and camps. This post includes some highlights about the credit and guidance on where to start to see if your ministry is eligible.

Tags: ERC, payroll, tax credit
April 23, 2021
Predictions and Insights for VBS 2021
Predictions and Insights for VBS 2021

If your church is anything like mine, Vacation Bible School (VBS) is a big deal. Not just because it is central to our ministry’s outreach to young families, but because of the important role that VBS plays in the spiritual formation of children.

Tags: COVID-19, health, health safety, protect, coronavirus, Christmas, risk management
April 19, 2021
Take Time to Review Your Ministry's Child Protection Plan
Take Time to Review Your Ministry's Child Protection Plan

April is National Child Abuse Prevention Month. Though child abuse may not be something you could ever imagine happening within your ministry, sexual abuse of a minor is one of the top five reasons churches end up in court, according to Church Law & Tax. Studies also show that a child is much more likely to be sexually abused by a trusted adult than a stranger.

Tags: protect, risk management, child safety, child protection, youth, childcare
March 16, 2021
Prepare for Severe Spring Storms Now
Prepare for Severe Spring Storms Now

When severe storms strike, they can produce high winds and tornadoes. Damaging winds can wreak havoc on your ministry’s property and to buildings. A high wind event can crash debris through your windows, strip your siding, down trees on your parking lot, peel shingles off your roof, and fling back the flashing.

Tags: weather emergency, lightning, storms, safety, protect
February 25, 2021
Catalytic Converter Theft on the Rise: Protect Ministry Vehicles
Catalytic Converter Theft on the Rise: Protect Ministry Vehicles

Thieves are taking advantage of soaring precious metal prices. Take steps to protect your ministry’s vehicles and property.

Tags: protect, theft, vehicle
February 15, 2021
Grant Funds Available for Safeguarding Ministries
Grant Funds Available for Safeguarding Ministries

As the Director of Ministry Safety for our agency, I am dedicated to finding ways to help safeguard ministries like yours.

Tags: COVID-19, health, health safety, protect, coronavirus, Christmas, risk management
February 5, 2021
Avoid Frozen Pipes as Temperatures Plummet
Avoid Frozen Pipes as Temperatures Plummet

As temperatures plummet, the risk of freezing pipes soars. Frozen pipes can cause costly messes that could also put your ministry on hold while you clean up.

Tags: frozen, building, pipes, prevent damage
January 12, 2021
Potential Vulnerabilities in School's Safety Plan
Are there hidden vulnerabilities in your school's safety plan?

On behalf of our agency, I recently participated in one such training which focused on strategies and tactics for responding as a single officer to an active safety threat in a school building.

Tags: COVID-19, health, health safety, protect, coronavirus, Christmas, risk management
January 5, 2021
Church Safety Trends for 2021
Church Safety Trends for 2021

If you’re anything like me (and maybe the rest of the world for that matter), you’re grateful to put the craziness of the past year behind us.

Tags: COVID-19, health, health safety, protect, coronavirus, Christmas, risk management
November 23, 2020
COVID-19 and the Christmas Season
COVID-19 and the Christmas Season

Preparing for this Christmas season may require additional creativity, due to the uncertainty of what COVID-19 may bring in our local community.

Tags: COVID-19, health, health safety, protect, coronavirus, Christmas, risk management
October 28, 2020
Guidance for Ministries About Boy Scouts' Bankruptcy
Guidance for Ministries About Boy Scouts' Bankruptcy

A mid-November deadline in the Boy Scouts of America’s (BSA) bankruptcy proceedings may have you wondering what the organization’s bankruptcy filing means for your ministry if you ever hosted or chartered Boy Scout Troops.

Tags: coverage, protect, liability, damages, youth
October 1, 2020
Applying for PPP Loan Forgiveness
Applying for PPP Loan Forgiveness

Organizations that obtained Paycheck Protection Program (PPP) funding through the CARES Act can have their loans forgiven, turning them into grants. To qualify, each borrower must file a forgiveness application with its PPP lender, proving that it followed the rules. If your church, school, college, or camp meets all the criteria, 100% of its loan can be forgiven.

April 13, 2020
Beware of COVID-19 Cyber Scams
Beware of COVID-19 Cyber Scams

Ministries are creatively scrambling to continue their operations and safely engage their congregations with an array of online technologies during the coronavirus pandemic. Unfortunately, hackers are ready to take advantage of the confusion with scams designed to steal valuable data or siphon funds from your ministry.

Tags: fireworks
March 30, 2020
CARES Act: Churches Need to Apply Now
UPDATED: CARES Act: Churches Need to Apply Now

Learn about the CARES Act and two loans for which ministries may be eligible, since Congress authorized additional funding April 23.