Why Bonding Matters for Ministries
The Book of Discipline mandates that churches bond their treasurers (¶ 258.4b), highlighting the need for this essential layer of financial protection. But what exactly is bonding, and why is it important? Let’s dive into the United Methodist Insurance Program’s quick guide to bonding to help you understand the benefits.
What is a Bond?
A surety bond is a binding contract that helps ensure financial obligations are met and provides coverage for certain losses if they aren’t. In other words, having a bond protects your ministry from financial misappropriation. Whether the mishandling of funds is intentional or accidental, a surety bond can protect your church’s finances.
Cost-Effective Coverage
Bonds offer an affordable way to supplement your current insurance plan. They provide higher limits than those typically found in a standard church business owner’s policy, giving you peace of mind at a low cost.
Protection for Employees & Volunteers
One of the biggest advantages of being bonded is its ability to cover both employees and volunteers. Unlike standard crime coverage, which doesn’t always extend to volunteers, bonds provide a broader safety net, ensuring that all individuals entrusted with handling church finances are protected.
Beware of the Conviction Clause!
When purchasing a bond, keep an eye out for the “Conviction Clause.” This clause means the church can only collect on the bond if the bonded individual is convicted of a crime. Understanding this conditional clause is crucial for full, comprehensive protection.
No Deductibles
Unlike crime coverage, which typically comes with a deductible, bonds often do not. In the event of a claim, the church can recover the full amount of the loss without having to pay out-of-pocket expenses.
The United Methodist Insurance Program is here to support you in navigating coverage so that you may protect your resources, comply with The Book of Discipline, and provide peace of mind to your congregation. Let's talk! Contact us at 484-654-3380 or click here to request a free quote online.
This content has been prepared by United Methodist Insurance Company (UMI) for informational purposes only. No article or document may accurately contemplate all possible scenarios or church resources. As such, this information is meant to foster discussion by the individual church and its members to develop a plan tailored to its own circumstances. UMI is providing this information with no warranties or guarantees of any kind and it should not be viewed as legal, financial, or other professional advice. All liability is expressly disclaimed. Any claim examples described herein are general in nature, may or may not be based on actual claims, and are for informational purposes only. Any coverage available for a claim is determined from the facts and circumstances of the claim as well as the terms and conditions of any applicable policy, including any exclusions or deductibles. In the event of a conflict with the content herein, the terms and conditions of any issued policy will control. Individual coverage may vary and may not be available in all states.
The commercial insurance coverages for United Methodist Insurance are sold and serviced directly or indirectly by Sovereign Insurance Agency (CA Lic. No. 0B01380) ("Sovereign") and underwritten by various available insurance markets. Sovereign pays United Methodist Insurance a royalty for the use of its intellectual property.
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