Fidelity Liability Insurance protects your church's funds against dishonesty by employees, vestry members, trustees or volunteers inside the church, as well as forgery and fraud by those outside the community. Since such dishonesty can lead to serious financial loss, Canon law requires that all Episcopal churches have adequate fidelity coverage.
This low-cost insurance protects against losses from:
- Checking and other accounts a treasurer or other employee may handle.
- Contributions, including donations and plate collections.
- Payments from any source under church administration (such as school, day care tuition or fees and thrift shop receipts).
Because the cost of Fidelity Liablity Insurance is so reasonable under our special group program, we encourage you to cover your highest total exposure to risk.
Two types of coverage
- The Employee Dishonesty policy protects against dishonest acts by employees, directors, trustees or volunteers. Coverage is for loss from any one occurrence, after a deductible amount.
- The Forgery & Alteration policy protects against loss resulting from forgery or alteration of checks, drafts or promissory notes made by those who are not employees, directors or trustees. No deductible applies.
Minimizing the risk of loss
You can reduce temptation and help prevent financial loss by:
- Conducting an annual audit by an outside CPA.
- Assigning the task of reconciling accounts to someone who does not have check signing authority.
- Countersigning checks of $1,000 or more.
- Making sure at least two people count collections.
In fact, your organization must follow these steps to qualify for immediate coverage.
Activating Your Policy
Coverage is effective on the date you request it or the date the Church Insurance Agency receives a properly completed application.
If a CPA does not audit your finances, explain your auditing and control process in writing when you apply. For example, who reviews your financial statement? Is that person a parishioner? Independence is an important factor in a financial review.
Note: The rector's discretionary fund is covered only if it is audited annually by an outside CPA.
How much insurance?
Generally, you should not buy more fidelity coverage than your annual revenue from all sources. At the minimum, 25% of total annual revenues is recommended. Situations vary, so please call (800) 223-6602, weekdays 9 a.m. to 5 p.m. ET, or use the Contact Us button on this page to send us an e-mail.
Fidelity liability insurance basics
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