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What Insurance Does a Church Need in Texas?

A church in Texas needs more than a property policy and a general liability policy, and the reason is written directly into state law. Texas gives charitable organizations a powerful liability cap — but only if the organization carries a specific amount of liability insurance. Let that coverage lapse and the cap disappears with it. Here is what a Texas church actually needs, and why the order of these coverages matters.

Does Texas law protect churches from lawsuits?

Partly, and conditionally. The Charitable Immunity and Liability Act of 1987 — Chapter 84 of the Texas Civil Practice and Remedies Code — covers churches directly. Section 84.003 defines a charitable organization to include “a corporation, foundation, community chest, church, or fund organized and operated exclusively for charitable, religious… purposes” under Section 501(c)(3) or (4).

Chapter 84 does two significant things:

  • Volunteer immunity (§84.004). A volunteer “is immune from civil liability for any act or omission resulting in death, damage, or injury if the volunteer was acting in the course and scope of the volunteer’s duties.”
  • Damage caps (§§84.005 and 84.006). Liability of a non-hospital charitable organization — and of its employees — is capped at $500,000 per person and $1,000,000 per occurrence for bodily injury or death, and $100,000 per occurrence for property damage.

What is the catch?

Section 84.007(g). The caps in §§84.005 and 84.006 “do not apply to any charitable organization that does not have liability insurance coverage in effect.” That coverage must apply to the acts and omissions of the organization, its employees, and its volunteers, and must be at least $500,000 per person and $1,000,000 per occurrence for death or bodily injury and $100,000 per occurrence for property damage. The statute adds that the requirement “may be satisfied by the purchase of a $1,000,000 bodily injury and property damage combined single limit policy.”

So the practical rule is blunt: no qualifying liability policy in force means no statutory cap. A church that lets coverage lapse to save money has not saved money. It has traded a $1 million ceiling for no ceiling at all.

Chapter 84 also has limits worth knowing. Under §84.007, it does not apply to conduct that is “intentional, wilfully negligent, or done with conscious indifference or reckless disregard for the safety of others.” It does not limit officers’ and directors’ duties to the organization itself. And it does not apply to an organization formed substantially to limit its liability under the chapter.

What coverages does a Texas church actually need?

General liability — at the statutory limits or better

Start here, and set the limit deliberately rather than by default. A $1,000,000 combined single limit is the figure Texas law names as satisfying §84.007(g). Most churches should carry more, layered with an umbrella, because the cap does not apply to the excluded conduct above and does not bind out-of-state or federal claims in every posture.

Sexual abuse and molestation liability — usually a separate purchase

This is the coverage churches most often assume they have and most often do not. Abuse and molestation exposure is commonly excluded or heavily sublimited on a standard general liability form and has to be endorsed on or bought as a standalone policy. Two mechanical details decide whether the coverage will actually respond:

  • Claims-made versus occurrence. Most abuse coverage is written claims-made, meaning the claim must be reported during the policy period. Abuse claims surface years or decades after the conduct.
  • The retroactive date. On a claims-made policy, conduct before the retroactive date is not covered, no matter when the claim comes in. Switching carriers can silently reset that date and erase decades of protection. Ask for it in writing at every renewal, and never let a new policy start with a retroactive date later than the old one.

Texas law recognizes how serious this exposure is in a different way: §84.0066 grants good-faith immunity to a charitable organization that discloses to a prospective employer information about an allegation of misconduct by a former employee, volunteer, or contractor. The screening infrastructure — background checks, two-adult rules, documented reporting procedures — is also what underwriters will require before they offer meaningful limits.

Hired and non-owned auto

Almost every church has this exposure and almost none of them have thought about it. A volunteer drives their own car to pick up supplies, or a staff member rents a van for a youth trip. If there is a serious accident, the plaintiff sues the church, and a policy covering only vehicles the church owns will not respond. Hired and non-owned auto liability closes that gap, and it is inexpensive. If the church owns a bus or van, that is a separate commercial auto policy with its own driver screening requirements.

Directors and officers liability

Chapter 84 explicitly does not limit officers’ and directors’ duties to the organization or its members (§84.007(b)). Employment disputes, board governance claims, and member disputes over discipline or property decisions land on the board, not on the general liability policy. Many church D&O policies bundle employment practices liability, which is where most real claims come from — wrongful termination and harassment allegations from staff.

Property, with attention to the deductible

Read the wind and hail deductible before you read the premium. TDI’s consumer guidance illustrates the math: a 5% deductible on a $150,000 structure is $7,500, so “if the home needed $6,500 in roof repairs” the policy would pay nothing. Scale that to a $4 million sanctuary and a 2% wind/hail deductible is $80,000 out of the church’s own funds before a dollar of coverage responds. In the hail belt that runs through Central Texas, this is the single most consequential number on the declarations page.

Also confirm the building is insured at replacement cost, that ordinance or law coverage is present if the building is older, and that business interruption or loss-of-income coverage contemplates the loss of offering income while the building is unusable.

Workers’ compensation — optional, and worth buying anyway

Texas is unusual here. TDI states plainly that “private employers can choose to carry workers’ compensation insurance coverage, but it is not required in most cases.” Churches with paid staff are private employers and may go without.

The trade is the exclusive remedy. A subscribing employer’s liability is limited when an injured employee sues; a non-subscriber loses that defense and can be sued for ordinary negligence without the common-law defenses. Non-subscribers must also report their status to the state and report lost-time injuries to the Division of Workers’ Compensation. For a church with even a handful of paid employees, coverage is usually the cheaper end of that trade.

What about volunteers, mission trips, and rented facilities?

Three quick items that generate a disproportionate share of claims:

  • Facility use agreements. If outside groups use the building — scouts, recovery meetings, weddings, a school — get a written agreement with a hold-harmless clause and a certificate of insurance naming the church as additional insured. Without it, their accident is your claim.
  • Mission trips. Domestic general liability typically does not follow the group overseas. Foreign liability, travel medical, and evacuation coverage are separate purchases, and they need to be in place before deposits are paid.
  • Employee dishonesty and fraud. Small congregations run on trust and single-signature checkbooks. Crime coverage with employee theft and funds transfer fraud limits belongs on the schedule, and dual-signature controls belong in the bylaws.

If your church is in Guadalupe, Comal, or the surrounding counties, one specific thing not to worry about: TWIA windstorm coverage applies to designated coastal counties, not to inland Central Texas. Your hail exposure is real; your TWIA exposure is not.

The most useful thing a church board can do this quarter is confirm two facts in writing: the general liability limit meets §84.007(g), and the abuse and molestation policy’s retroactive date reaches back to the beginning of the ministry, not to the last time the church changed carriers. We will check both against your current policies at no charge — call 830-303-8300 or see how we work with churches and non-profit ministries.

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