Risk Management and General Liability

May 04, 2022

What is General Liability Insurance?

General liability insurance is a type of insurance policy that is designed to cover you (the first party) for the general claims of a third party (not you) involving bodily injury or damage to the property of a third party caused by the first party. In the context of church ministry, think about claims made against your entity if a) someone gets injured, b) their belongings get damaged, either while at any of the covered denominational premises or while participating in any of the organised activities. In some respects, coverage under general liability may be more extensive than public liability.

General liability insurance responds if there is proven negligence on the part of the church entity (the first party). Imagine that during a potluck, a tabletop that was not attached to the table legs falls and breaks Sister Martha’s (the third party) phone and glasses. We can argue that the church was negligent for not securing the tabletop to the legs. In this case, general liability insurance would likely cover the costs for repairing or replacing both the phone and the glasses, depending on the specific limits and exclusions of the policy.

On the other hand, if Sister Martha broke her phone and glasses as she sat on them while getting ready for the potluck, it would hardly be the church’s negligence. The liability insurance may not respond.

Duty of Care

This includes:

Safety of the physical environment. Many general liability claims are due to simple hazards that create risks, such as trips, slips and falls, so special attention in this area is needed. An easy way to prevent these kinds of hazards is to follow safety protocols, such as removing cables that might be stretched across walkways or aisles. Ensure handrails are well secured and in good condition, carpets are not torn or wrinkled, and pathways are not slippery. When taking a group of people to a camp, for example, all precautions must be taken to ensure that the camp is safe, there are signs indicating danger, and the boundaries are clearly marked.
Safety of the people. Take measures to protect the health, well-being and human rights of individuals. Bear in mind the safeguarding of children and vulnerable adults when organising activities both indoors and outdoors. This includes implementing all safety regulations imposed by local governments related to any epidemic or pandemic such as Covid-19

Risk Management

Essentially, the goal of risk management is to identify potential problems before they occur and to implement necessary safeguards. This is done by assessing the probability of something bad happening.
The main elements of the risk management process are:

To identify the risks – What could go wrong? What are the risks?
To assess – What is the likelihood of the risk occurring? How severe will the risk impact be?
To control – What can you do to reduce the impact of the risk?
To monitor – Was the risk minimised or eliminated? Are there new risks emerging?

Whether you are planning a new activity, a potluck or simply walking around your church or school building, I invite you to ask yourself the questions mentioned above.

Acknowledging danger does not mean being pessimistic. On the contrary, it means taking comfort and ease in being prepared. Will Gadd, a prominent Canadian ice climber and paraglider pilot, talks about “the positive power of negative thinking”. He states that many times he survived improbable situations because he anticipated all sorts of scenarios of how things could go wrong, and he planned accordingly.

Asking what could go wrong and how to deal with it when it does is the mindset of a good risk manager.

The possibility of bad things happening should not hinder people from organising activities and projects. As a matter of fact, it should encourage them to plan and implement new projects knowing that it has been well thought of, and should anything go wrong, necessary provisions have been put in place.