Can Churches Afford the Liability?
By Rev. Jack Cascione

 

The May 30, 2002, issue of Time Magazine has an article by Frank Gibney Jr. which asks the question, "Can the Church Go Broke?" Gibney writes about the potential billions of dollars in losses from all of the sexual abuse cases now being filed against the Catholic Church. Some of this is covered by insurance, some is self-insured, and the Catholic Church's personal assets must cover the rest.

What the article doesn't talk about is that insurance companies are increasing their rates for sexual abuse cases to all churches in the United States. Insurance companies often purchase insurance from reinsurance companies in order to minimize their risks.

The Lutheran layperson in the pew shouldn't think all of this is just a Catholic problem. This year all churches in the United States, be they Catholic, Baptist, Lutheran, etc., will be paying greatly increased rates for sexual abuse coverage. Lutheran Mutual, Church Mutual, Lutheran Trust and others are all increasing their rates.

This year it is a double hit. Not only are sexual liability coverages increased, insurance rates on fire, theft, and property loss are going through the roof. The losses at the Twin Towers are ultimately being shared through reinsurance companies by all insurance companies. This means rates will go up for all churches, homes, and businesses.

For those who saw a picture in Time Magazine of the massive three story stone mansion, the residence of Bernard Cardinal Law, you may have recognized it as the location for the movie, "Meet Joe Black."

Yes, it is magnificent, but this writer had the opportunity to eat dinner at Cardinal Martini's palazzo in Milan while attending the Society for New Testament Studies in 1990. Cardinal Martini had tables set for 300 of us outside, under the two-story colonnade on the ground level that surrounds his cobblestone courtyard. So, don't be too impressed with Cardinal Law's residence. After we ate, Cardinal Martine arrived in the courtyard in his Mercedes limousine with his chauffer, escort cars, and motorcycle police.

Yes, the Catholic Church is easily the largest single owner of real estate in the world. The part of the Catholic Church's holdings and operations that are insured by commercial carriers is reinsured through companies that ultimately cover your local congregation.


Rev. Jack Cascione is pastor of Redeemer Lutheran Church (LCMS - MI) in St. Clair Shores, Michigan. He has written numerous articles for Christian News and is the author of Reclaiming the Gospel in the LCMS: How to Keep Your Congregation Lutheran. He has also written a study on the Book of Revelation called In Search of the Biblical Order.
He can be reached by email at pastorcascione@juno.com.

May 30, 2002