It is a familiar scene in church leadership meetings across Texas in the fall. The agenda is full and the discussion turns to the upcoming Fall Festival. A diligent deacon looks at the budget and asks if the church is required to have liability insurance for the bounce house rental.
A different deacon across the room leans back and suggests that we do not have to worry about lawsuits like a regular business does. Something about charitable immunity is mentioned, but no one can actually define it.
That conversation is terrifyingly confusing. And usually wrong.
There is a massive disconnect between what is legally required by the State of Texas and what is financially required to keep your Texas church's mission alive. Texas law is complex and charitable immunity has significant cracks. If you do not understand the difference between General Liability Insurance and Directors and Officers (D&O) Insurance you are leaving your church exposed.
Here are the five realities of Texas Church Liability Insurance that every church leadership team must face whether you are in Ft Worth, San Antonio, or Lubbock.
1. Liability Coverage Is Not Required By Law But It Is Financial Suicide To Not Have It
Unlike Commercial Auto Insurance where you must be able to prove liability protection, the State of Texas does not require a church to have General Liability or similar protections to operate. They will not send police to your door to verify you have coverage. You can legally open your doors for service without it.
However, operating without it is a trap. If a visitor trips on a frayed carpet or a child is injured in the nursery, the church is fully responsible for the medical coverage for bills and legal defense. Without a general liability insurance policy those costs come directly from the cash reserves, tithes, or the building fund.
While you rightly might focus on Property Insurance to protect the church property from hail, the liability risk is just as important to keeping the doors open. Operating without General Liability Coverage means every allegation comes out of your pocket. It is not a legal compliance issue. It is a stewardship of assets issue.
2. Charitable Immunity Is Not A Shield
Many pastors and boards believe the Texas Charitable Immunity and Liability Act stops all lawsuits against religious organizations.
The reality is much harsher. This law only limits damages in specific negligence cases. It does not stop you from being sued. It does not pay for your defense attorney. It often vanishes entirely in cases of gross negligence. And you must be carrying liability insurance for it to apply.
Most importantly, leaning on it does not mean you do not have to defend your church from accusations. The legal defense alone can cost hundreds of thousands of dollars.
You can let insurance coverage pay for the fight and not just the settlement. Relying on immunity instead of a comprehensive insurance policy is a gamble that can cost your church their future. You need true insurance protection to handle the legal fees that pile up long before a verdict is reached.
3. The Sexual Misconduct Gap
This is the most dangerous exclusion in many church insurance policies.
Standard General Liability Insurance covers bodily injury like slips and falls. It typically excludes claims related to abuse or harassment. If your policy does not have a specific line item for Sexual Misconduct Liability or Sexual Abuse and Molestation Insurance you likely have zero coverage for these allegations.
We have seen too many policies that rely on generic nonprofit liability insurance which leaves this massive gap. If a staff member is accused of harming a child the carrier will deny the claim and the church will face the lawsuit alone. You must ensure this specific coverage is included with adequate limits.
4. Your Board Is Personally Exposed
General Liability protects the church entity. It does not protect the personal assets of the board members for their decisions.
Your board members can be sued personally for financial mismanagement even if the mistake is not that big. This is where Directors and Officers liability insurance becomes essential. It is also known as directors, trustees, and officers liability insurance.
Without this specific coverage, you may find it impossible to recruit prudent leaders to serve. They should not have to bet their retirement savings to serve on your committee. This coverage often pairs with employment practices liability to cover claims from staff regarding hiring or firing decisions.
5. Counseling Is A Professional Risk
When a pastor provides spiritual counseling they are acting as a professional.
If a marriage falls apart after counseling and the couple sues for bad advice that led to financial ruin or emotional distress a standard policy will deny the claim. This falls under professional liability or pastoral liability.
Just as a doctor needs malpractice insurance a pastor needs pastoral counseling insurance. This coverage protects the words spoken in confidence. If this is not explicitly added to your church insurance programs your pastoral staff is operating without a net.
Building A Complete Wall of Protection
True risk management requires looking beyond just these five points. A comprehensive review by a qualified church insurance advisor will reveal other gaps that need attention.
Here is a list of the types of coverage that you need to consider to make sure you have a complete wall of protection for your church.
- General Liability Insurance
- Professional Liability Insurance
- Sexual Abuse and Molestation Insurance
- Workers' Compensation Insurance
- Cyber Liability Insurance
- Employee Benefits Liability Insurance
- Directors and Officers Liability Insurance
- Media Liability Insurance
- Special Event Liability Insurance
- Employee Theft Insurance
That list looks long and expensive. The good news is that you may not need all of them and they aren't that expensive. An experienced church insurance advisor from a Texas insurance agency can easily help you decipher what you truly do and do not need.
At Insurance For Texans, we act as your guide through this complex landscape. We do not just sell your church a product. We provide customized property and liability coverage that matches your specific activities. We audit your exposure to ensure your insurance costs are purchasing actual protection rather than just a piece of paper.
That's what True Texas Church Insurance is!
Don't wait for a process server to knock on the door. Let us help you secure the future of your ministry with the right Church and Nonprofit Insurance package.
Click the button below to get True Texas Church Insurance and properly protect your church's mission and future.