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Risk Management Resource: Facilities Use Agreement

Church Finance Basics
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Take this important step before you share your church facilities with an outside group

One thing many churches don’t think about is their potential liability when they allow outside groups or other churches to use their facilities. Some churches may have a martial arts group, boy scouts, a daycare, or a separate church plant using the building. If someone from the group gets hurt on their premises, the church could be held responsible as the owner of the property. In addition to exposing the church to legal liability, such accidents can increase the church's insurance premiums. The good news is you can minimize church liability through a facilities use agreement.

What Is a Facilities Use Agreement?

A facilities use agreement helps shield your church from liability while still allowing you to offer a space for outside groups to meet. In it, you can set forth the terms for how the group will use your premises, specifying that they will be left in good condition and surrendered back to the church. You can also include language stating the group will hold your church harmless and indemnify it. "Indemnify" means the group agrees to pay your church back if you have to pay any kind of damages because of an incident.

What about Insurance?

It is best for any group using your facility to have insurance. Your facilities use agreement should include an insurance clause in the language. When the group has insurance, protecting your church is simple. Just ask them to name your church on their general liability policy as an additional insured and provide you with a certificate of insurance showing your church has been added. This transfers primary responsibility onto their insurance, rather than the church's.

Many churches allow church plants to meet in their facilities. As a best practice, the church plant should have their own insurance and sign a facilities use agreement. A basic general liability insurance policy is not expensive, but it provides crucial protection both for the church plant and the church that owns the building.

What about Weddings or Other One-Time Events?

If the event is for a group, require a signed facilities use agreement and certificate of insurance. If it is an individual's wedding or something for a member of the congregation, a facilities use agreement is not needed. In general, risk should be evaluated in light of the type of activity, the number of people involved, and whether the group is made up of children or elderly people.

Sample Facilities Use Agreement Form

Next time you open your facilities to an outside group, make sure you are protected by downloading this sample Facilities Use Agreement Form.*

To learn more about ways to reduce church risk, call our risk management team at 866.621.1787 or email me at jsparks@agfinancial.org.

Does your church allow outside groups to use your facilities? What protective measures do you use? Leave your comments below.

*This is a sample form and should be reviewed by a local attorney. This article does not constitute legal advice and is not a substitute for obtaining professional legal counsel.

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