Avoid the Incurred Liability Risks of Loaning Your Church Vehicles to Others .

Considering loaning your church van to another church? THINK AGAIN!.

One day you receive a telephone call from a church Pastor in your area and they ask the big question…

“Can we borrow your church vehicle for a mission trip, summer camp, or youth event?”. How do you respond to this request without offending the Pastor and alienating a brother or sister in the ministry? How could loaning a church vehicle to another organization affect your commercial auto insurance coverage?

With every ministry decision made by your church you must ask yourself, “What can go wrong?” In any ministry program or activity such as a food pantry, bus ministry, outreach program or youth event with inflatables…you must consider what could conceivably go wrong?

It is not in the best interest of the church to loan your church vehicle(s) to another church or organization. An accident, especially with an incurred injury, could draw your church into a lawsuit not of your creation. And the results could be detrimental as well as expensive to your church.

By loaning your vehicle there are several considerations you NEED TO BE AWARE OF:

• You do not know who will be driving the vehicle.
• You do not know the drivers three-year MVR (Motor Vehicle Report) regarding tickets and accidents
• You do not know if the driver has a valid driver’s license.
• You do not know if the driver has any restrictions on their driver’s license i.e.: night driving, visual impairment requiring Glasses or contact lens, etc.
• You do not know if the driver has liability insurance coverage and what limits they carry.
• You do not know the age, experience or commercial driving ability of the driver.

According To Brotherhood Mutual Company

Consider these questions:

• Could your church be sued because of the actions of others of which you have no control?
• Is the church van owner fully liable for damage caused by the negligent operation of others?
• Does the requesting church have commercial auto insurance coverage including
  Hired and Non-Owned Auto coverage?
• Who will be driving your church owned vehicle if you allow another organization to select the driver(s) without your approval or control?

Brotherhood Mutual insurance Company , a leading church insurance provider, suggests the following points to consider if you choose to allow another organization to use your vehicle:

1. If you allow another organization to borrow your vehicle, are you prepared to be held fully liable for any damage caused by the negligent operation or maintenance of the vehicle by others?
2. Does the vehicle user know that your insurance policy may not adequately cover others outside your organization?
3. Does the vehicle user understand that any damage done to the vehicle while in his or her possession must be paid out of his or her organization’s pocket or own insurance, if the organization
   has such coverage?
4. Will you specify in a written agreement with the user who is responsible for damage to your vehicle as well as any other points of understanding?
5. Does the agreement make the user responsible to defend, indemnify, and hold your church harmless for any losses resulting from their use of your vehicle?
6. Does the agreement specify that the user is responsible for purchasing special liability and vehicle damage protection to cover damage to your vehicle?
7. Is the vehicle, that you plan to loan or rent, in top mechanical condition?
8. Is the other organization going to use the vehicle for church or church school activities?
9. Have you consulted with your attorney before allowing another organization to borrow or rent your vehicle?

If you want to help the requesting organization find transportation consider aiding them financially by renting or chartering a vehicle from a rental agency rather than running the risk of loaning or renting your vehicle. Avoid leasing or loaning your church or ministry vehicles due to liability exposure since your insurance policy only covers your ministries use of the vehicle including a review of approved drivers. If you decide to loan your vehicle consider providing a driver from your church’s approved driver list to manage and protect your church vehicle and liability exposure.

Understand What Your Insurance Policy Covers

Summary:

Your insurance carrier will not allow your vehicle to be used for any purpose other than church functions and the driver must be approved by the insurance carrier to drive for church activities. Violation of this underwriting protocol could result in cancellation of your commercial auto insurance policy.

Do not loan your church vehicle…it is not worth the risk.

Download a PDF Brochure of this article:
CRB-Loaning Out Church Vehicles 8-13-19

ABOUT THE AUTHOR: Dr. Michael B. Russell, MA, MBA, DSL, MLIS is a licensed insurance consultant working with churches and faith based non-profits for over 28 years. He is a frequent speaker to seminary students and an adjunct professor for Gateway Seminary, the Oahu Bible Institute in Honolulu, Hawaii, and a guest lecturer at the University of Arkansas Fulbright College Department of Communication. He can be reached at mike@mrains.net or by visiting ChurchRiskBlog website

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