Get a Jump on Risk Management

Get a Jump on Risk Management

In today’s litigious society, churches need to be proactive in risk management. Buying insurance is only one avenue for helping protect the church, its employees, its congregation and its reputation. A claim can be higher than your limit of insurance, a claim may not be covered, or a claim can even affect the attendance of the church. How you deal with these risks can make a difference in the longevity of the church.

Our goal is to help make your church safer by offering guidance to help you control your risk. As the area of church safety and risk management continues to grow in importance, we are committed to provide quarterly articles dealing with specific risks for churches, and ways to minimize risks to provide a safe environment for all. This quarter’s article will highlight things you should know in balancing safety with the fun of inflatable rentals.

Churches continue to be a place of celebration, whether it’s an activity with members or a community outreach event. A common component to fun church events is the inflatable. Though they are popular with children as a fun activity, they pose a hazard for churches.

As a general rule of thumb, you need to read the fine print from the rental company to make sure your church is not picking up all the liability.

Typical agreements hold rental companies harmless.
A standard rental contract reads: Client agrees to indemnify and hold vendor harmless from any and all claim, actions, suits, proceedings, costs, expenses, fees, damages and liabilities, including, but not limited to, reasonable attorney’s fees and costs, arising by reason of injury, damage or death to persons or property, in connection with or resulting from the use of leased equipment.

Even though leasing companies usually provide staff to oversee bouncing houses, inflatable slides, or rock walls, if a child is injured, it’s typically the church—not the company—that is on the hook. Unless the church purchases a damage waiver, the same may be true if the equipment is damaged, no matter the cause. It is important to follow the guidelines for each inflatable, especially limits, capacity, and supervision requirements.

Ensure the rental company provides coverage for you.
Require the leasing company to name the church as an “additional named insured” and provide you with a certificate of insurance showing at least $1 million in coverage. If possible, invest extra money to get the leasing company to remove the “hold harmless” wording from the contract. Doing so will shift liability from the church back onto the leasing company. You may even get the vendor to give the church a “hold-harmless agreement.” Some vendors are reluctant to make such provisions in their contracts. If the company will not meet these requests, find one that will.

Authorized personnel must sign lease.
Often, youth pastors are the ones who sign the lease agreement. Remember, only officers of your corporation are permitted to sign legal contracts. It is important that all church employees know who is authorized to sign contracts. However, the church may still be held liable, even if the contract is signed by someone who is unauthorized.

Some insurance companies specifically exclude coverage for inflatable equipment.
Check with your insurance provider to determine if you are protected. Failure to implement and follow the proper safety protocols could be disastrous for both the victim and the church.

Inflatable equipment creates a lot of fun—and a lot of liability. If you have any risk management questions, or if we can assist your church in dealing with inflatables, please contact AG Financial Insurance Solutions at 866.662.8210. We have a certified risk manager and attorney on staff to assist you.

Jerry Sparks, President
AG Financial Insurance Solutions
jsparks@agfinancialinsurance.org