Insurance Matters

Risk Management Director INSURANCE MATTERS Rhonda Harper Risk Management Director

TYPES OF INSURANCE - Churches Property and Liability Worker’s Compensation Health Care for Employees Auto/Vehicles Travel Insurance Employment Practice Policy for Sexual Harassment/Wrongful Termination Executive Risk (Crime Coverage, Boards)

WHAT IS ADVENTIST RISK MANAGEMENT? Adventist Risk Management (ARM) was established in 1936 to serve and protect the ministry of the SDA Church. Their sole mission is to support the Adventist denomination by providing real-world solutions for minimizing risks. They view themselves as a ministry to the church, not just a business. They insure Seventh- day Adventist entities worldwide.

Three Parts of ARM Ministry Risk Identification Risk Control (prevention) Risk Financing (insurance)

NAD WORKING POLICY Sets the policies / limits for all church operations against risk of accidents, property and liability losses, and medical claims. Policies are found in NAD Working Policy S 60 Risk Management Policies

NAD POLICIES The officers and managers of denominational organizations shall initiate measures to prevent losses, and shall be responsible for maintaining adequate insurance coverage or self insurance funds.

NAD POLICIES Losses and accidents must be reported on a timely basis. It is the duty of the auditor the check and report as to whether insurance coverages are in harmony with NAD policy.

Florida Conference Spends approximately $6,000,000 per year for insurance premiums, NOT INCLUDING health care and employee benefits. Some insurance costs are passed along to the various entities within the Conference, including the churches, schools, child centers, camp, conference office, and community service centers.

ANNUAL INSURANCE PACKAGE INCLUDES: General Liability Executive Risk – Boards, Directors Coverage, Crime Coverage Volunteer Labor Premises Medical for members/ guests on and off property Excess Liability EPL (Sexual Harassment/ Wrongful Term) Verified Volunteer Screening Program

PROPERTY INSURANCE Adequate insurance shall be carried on all denominational properties, on the basis of replacement value, for both buildings and contents. Anything below replacement value would be considered as actual cash value should a claim occur.

PROPERTY….. The property insurance is billed to each location annually. Bill is based on the location, square footage, construction, and value. This is a commercial policy, with a $5,000 deductible for any claim, except named storm is 3% of the value of the affected property, or a minimum of $25,000.

Property Claims 1/1/2014 – 6/15/2019 Wind $2,357,944 Flood 1,341,188 Water 613,825 Lightning 252,157 Tornado 102,301 Hail 94,072 Burglary 69,014 Other 66,799 Falling Object 41,676 Fire 32,091 Frozen Pipes 26,798 Equipment Breakdown 24,395 Vehicle damage to prop 24,028 TOTAL $5,054,775 166 CLAIMS

A Blessing….. Property claims deductible assistance - $1,500 for any claim paid exceeding the $5,000 deductible. Irma Assistance – Paid in 2018 NAD - $551,000 SU - $158,000 FLC - $546,000 Total: $1,255,000 for FL Conference churches and schools!

General Liability Allocation The liability premium package as billed by ARM (which includes excess and volunteer labor) is allocated to our churches and entities. This year a formula using membership as well as risk and exposure as evidenced by claim history was used, as voted by Executive Committee. It is anticipated that other factors will be included in the formula in the future.

Billed Separately for Liability Community Service Centers / Thrift Stores Dwellings / Apartments Child Care Centers Radio Stations Schools Camp, Academies, Conference Office Trusts

GENERAL LIABILITY LOSSES 1/1/2009 – 6/15/2019 CAUSE AMOUNT NUMBER Bodily Injury $ 17,468,626 52 Premises Medical* 442,816 192 Property Damage 21,661 16 TOTALS $ 17,933,103 260 * Premises Medical are the misc. medical claims from guests, members, etc. that are injured on our property or at function. Our coverage is secondary over any insurance they may have. There is a $10,000 limit per claim. These are not law suits.

GENERAL LIABILITY POLICY DEDUCTIBLES Due to our loss experience, any claim exceeding $200,000 now has a 15% deductible. Example: Settlement of a claim totaled $150,000 = no deductible Settlement total $300,000 has a deductible $300,000 - $200,000 = $100,000 x 15% = $15,000 deductible The entity with the claim will be responsible for 13% of the 15% deductible, the Conference will pay 2%. At the end of the year we will review all the final claims for that year and will determine if we are able to reimburse the entity up to another 3% towards the deductible.

SAFETY INCENTIVE PROGRAM Can earn up to 6% credit off the upcoming 2020 Liability Package bill as follows: 2% - Attend one of two Safety Officer Workshops 2% - Conduct a fire drill or lost child drill during a service 2% - Submit the churches written Emergency Response Plan ALL items have to be reported to the Risk Manager by December 30, 2019. Accounting offered 2% discount off the insurance premium if payment was paid in full by May, 2019. A 2% processing fee is added into the insurance premium if a payment plan over 3 months is selected.

October 27, 2019 The second Safety Officer Workshop of the year will be held in the Southeastern Conference’s Deerfield Beach Church 350 NW 1st Terrace Deerfield Beach, FL 33441 Reservation Forms have been sent out. Must register by October 20th. President of ARM will be the guest speaker.

AUTO INSURANCE Any denominational entity that owns a vehicle must have it insured under the Conference’s commercial auto policy. This ensures the limits are within the NAD requirements of $3,000,000 liability per occurrence with no aggregate, and excess liability of $97,000,000. Policy is 7/1/19 to 7/1/20 - Billed separately

AUTO The Conference’s auto policy DOES NOT COVER personal vehicles. The owner’s insurance would apply should there be an accident. The Conference’s auto policy DOES NOT COVER borrowed or rented vehicles UNLESS we are notified ahead of time and the entity purchases a binder.

NEVER USE 15 Passenger Vans

15 Passenger Vans PROHIBITED MAY NOT BE USED, BORROWED, RENTED, OR OWNED BY ANY ENTITY!!!! BE CAUTIOUS WHEN RENTING A 12 PASSENGER VAN – IT MUST BE MANUFACTURED FOR 12 – NOT A 15 PASSENGER VAN WITH A SEAT REMOVED

AUTO LOSS HISTORY 1/1/2014 – 6/15/2019 CAUSE AMOUNT Bodily Injury $ 8,704,022 Property Damage 120,080 Collision 199,543 Comprehensive 34,620 PIP 8,817 Uninsured Motorist 3,453 TOTALS $9,070,537 CLAIMS: 62

AUTO POLICY 2020 THE AUTO RENEWAL FOR 7/1/2020 will most likely have a deductible for any claim paid out under the liability coverage. This will have to be done in order to keep the premiums down.

EMPLOYMENT PRACTICE LIABILITY This policy provides coverage arising from sexual harassment/ abuse claims. There is a $25,000 deductible starting at the first dollar. The entity involved with the claim is responsible for $20,000 and the Conference for $5,000. IT IS SO IMPORTANT TO HAVE ALL YOUR VOLUNTEERS DO THE BACKGROUND SCREENING PROGRAM!!!

VERIFIED VOLUNTEERS (STERLING) All volunteers working with children MUST complete the on line training and background screening before being allowed to work with children. Recently NAD voted that ALL church ministry leaders / officers appointed by the church must complete the Verified Volunteers (Sterling ) program.

NAD POLICY UPDATE Amendment FB-20 Child Protection and Volunteer Screening Policy c. Jesus placed a high value on the protection of children (Matthew 18:10); therefore, child protection is an essential element in all church sponsored children’s activities. d. All volunteers referenced in this section include ALL adults, over the age of 18, involved in any capacity in children and youth ministries and activities, and all church ministry leaders and officers voted or appointed by the local church consistent with the SDA Church Manual; volunteers voted or appointed by the conference, union, or the North American Division and its affiliates, as well as all registered volunteers either from within or outside the North American Division voted or appointed to serve in the territory. (Including the pastor.)

Verified Volunteers (Sterling Volunteers) Must recertify every three years; volunteers will receive an email from the program notifying them when they need to recertify Program available in English & Spanish Each location must have an administrator (or two) to oversee their entity Cost is now included in the General Liability Package that the churches are billed each year

Verified Volunteers (Sterling) The website is: https://www.ncsrisk.org/adventist/index.cfm??

ARM INFORMATION PACKETS Mailed out to all entities

QUESTIONS???? Rhonda Harper, Risk Management Director Patty Hoffecker, Assistant 407-644-5000 Rhonda.harper@floridaconference.com