Is D&O and E&O Coverage Important for Your Ministry?

Even though you may have the best intentions while running your church, there’s always the possibility that someone will commit a mistake. Unfortunately, these mistakes can be costly to both you and your church. Management and professional liability insurance in the form of Directors & Officers (D&O) insurance and Errors & Omissions (E&O) insurance can help protect your personal and church assets in the event of a lawsuit.

What is D&O insurance?
D&O insurance helps protect church directors and officers from the costs associated with being sued for actual or alleged claims of misconduct while running an organization.

What are some examples of what D&O insurance could cover?
• Failing to provide adequate financial oversight.
• Using budgeted or donated money for something other than for what it was originally intended.
• Putting the church’s tax-exempt status at risk.

Do I need D&O insurance?
It’s always a good idea to carry D&O insurance for you and your church to help protect them from potential lawsuits. Even if your organization runs effective ministries, a D&O insurance policy brings reassurance to your church that helps your staff focus on what matters most.

What is E&O insurance?
E&O insurance – sometimes known as pastoral counseling for religious organizations – provides professional liability insurance that is designed to help protect clergy members from legal action that relates to a work mistake, misguided counseling, or alleged negligence.

What are some examples of what E&O insurance could cover?
• Failure to recognize suicidal tendencies.
• Misguided counseling to congregants on topics like adultery, addiction, etc.

Do I need E&O insurance?
An E&O insurance policy helps protect your ministry from the defense costs associated with potential lawsuits. And while you and your staff may try to do the right thing, the possibility of errors or disagreements leading to a lawsuit can never be fully eliminated. By carrying an E&O insurance policy, you can help to prevent your church’s responsibility for an expensive legal bill.

It’s important to remember that anybody can sue you – whether their allegation is justified or not – and that the legal costs of a lawsuit can add up very quickly. Having a judge rule in your favor doesn’t guarantee that your court costs will be paid for by the claimant, but a D&O or E&O policy can help you and your organization fund your legal team regardless of the outcome.