I'm going to go out on a limb and guess that a very high percentage of churches that own property don't have the right level of insurance, if any at all. Is this a bold, ridiculous guess? Or, do I know something you don't.

First, I know from my experience that many church leaders have a hard time accepting the idea that they should pay for insurance to protect buildings and property. Honestly, some church leaders even have a problem with insurance coverage for defense costs in the event of a lawsuit.

Second, I read a lot of what's out there. How often have we read or heard about a church that was destroyed, either by arson, a hurricane, tornadoes, or other unfortunate event or catastrophe… only to learn that they will never rebuild because the church was under-insured, or not insured at all? If they decide to rebuild, it's usually on the financial backs of their members, who would much rather have footed an insurance bill than a rebuilding fund raising campaign.

Insuring the church and its property against foreseeable and unforseeable events should be one of the pillars of every church start up. Unfortunately, when many church leaders are busy starting a church, they mostly think about the ministry and outreach aspect. The idea of insurance may not realistically emerge to the forefront for months, or perhaps even years. In the meantime, they fail to recognize the enormous risk they face.

We know from recent events that disaster can and will strike anytime and anywhere. Even when we believe our earthly structures are… indestructible. If and when disaster strikes, whether in the form of a natural disaster, an atrocious act, or even a legal complaint against the church, will your insurance be enough to protect your church? Or will you be forced to close your doors… forever?

Here's one case where a devastating event has left an entire body of Believers unsure of what the future holds for them. No doubt they will wholeheartedly explore the idea of rebuilding. That's the natural response to such an event. But the uncertainty is simply too great when there was no insurance policy to foot the bill. Read it now at: www.msnbc.msn.com/id/16949257/

We're not really sure what will happen to the church in this story. But it doesn't sound too promising. What we didn't hear the spokesman say was, "We had the foresight to insure our property. We're already planning the rebuilding process."

Instead, I sense a sadness coupled with a feeble attempt to be brave. I understand the sense of loss and grief one can experience at a time like this. But my hunch is that the sadness comes from thinking of what it will take for church members to come up with the money to rebuild. Not an easy task.

It will certainly not as simple as it would have been to make monthly, quarterly or annual payments on an adequate insurance policy. Am I simply promoting insurance here? Not at all. It's a matter of being the kind of stewards that Jesus would have us be. It's a matter of being shrewd while innocent.

Adequate insurance coverage is not the only risk-management issue that churches face. And it certainly cannot replace an effective risk-management scheme of policies and procedures to help reduce risk and complexity. But should disaster ever come knocking on your church doors, be prepared so you find yourself piling tragedy upon tragedy.

I have found that church administration is not the most popular topic to write about. If I were solely concerned with popular church topics, I would be doing churches a disservice. But, my vast experience in serving churches tells me that church administration articles are among the most important for any new ministry, even if they don't want to hear it.

Understanding the numerous areas of risk involved in a church ministry is one of the best ways to protect it. As with most other things, to inform is to empower. What every church, not just a new church, should know is that risk can be managed.

But before you can manage risk, you must first identify and understand it. Identifying risk is not always easy. At times, it may seem like common sense. At others, it's counter-intuitive. Understanding risk is also not easy. Too many people are blinded by too many things, such as life experience, bias, and deep-rooted desires. I have found that helping churches identify and understand risk is a slippery slope that must be negotiated, no matter how seemingly insurmountable the minds and egos on the receiving end may be.

Of course, identifying and understanding risk cannot be accomplished in one, or even a few articles. It must be a two-way conversation because it begins with taking a deep look at who you are and what you do as a church ministry. This exercise can be as hard and painful as looking at who you are and what you do as a person.

In the same way that people are complex, ministries are complex because they reflect who we are as people. We've all done things we thought better of in hind sight. So it is with churches. In attempting a bit of foresight, I will begin this conversation with just a short list of the issues that potentially face any church, and therefore, of the inherent and created risk.

In going through this list, and considering the real life manifestation of each issue, we have to keep in mind the common thread; churches are all about people. Churches are nothing without the close, everyday, intimate and complex interaction among hundreds, sometimes thousands of unique individuals. Jesus does not operate in a vacuum. Therefore, when you have imperfect people involved in each others' lives in ways that are among the most intimate and profound in all of society, things are bound to happen.

And it's not simply an issue of church members, there are any number of constituents who are similarly affected, not the least of which is the community in which the church operates. The interactions, relationships, events, activities, discussions, messages, and opposing forces all add up to a mixture that is ripe for dispute, controversy, and even causes and effects for which a church may be hauled into court. Sometimes it's worse. Real human lives are involved. Even children can be tragically impacted.

Indeed, risk and complexity are a normal part of any church, as with any other microcosm of society and the world at large. Churches will never fully rid themselves of risk and complexity, and it may not even be desirable to do so. That is not to say that it can be ignored. On the contrary, ignoring even a small part of the risk and complexity that accompanies a typical ministry has resulted in a literal explosion of litigation against churches in the last decade. Where suing a church was once unheard of, today it is commonplace.

These lawsuits are often triggered by power struggles, the sharing of confidential information, questionable counseling practices, sexual misconduct, membership issues and the like. But there is no limit to the ways that risk may present itself within a church or ministry. The conflicts and risk elements are often converted into the following types of legal claims:

• Breach of Contract
• Negligence - Premises liability or risky church activity
• Negligent hiring, supervision or retention of employees or volunteers
• Clergy malpractice
• Defamation
• Negligent or Intentional Infliction of Emotional Distress
• Breach of Fiduciary Responsibility
• Violation of Corporate Bylaws
• Invasion of Privacy, or Breach of Confidentiality, and
  
• Abuse in the Teen or Children's Ministry… to name a few.
  

We'd like to think that ministers and other church leaders are much more adept at thinking these things through when contemplating the start up, or maturing process, of a church or ministry. But, the truth is that you'll be hard-pressed to find that course in divinity school. Besides, ministry and outreach is what is foremost on most church leaders' minds. Which leaves risk management to administrators.

Yes, this is really for the church administrators who often see their roles as simply collecting and depositing the weekly contribution, and accounting for it to church leadership. A church administrator who doesn't fully embrace the more important role I lay out here, doesn't really understand his or her calling. Church administration is a biblical role. The ad-ministry is an important ministry alongside all others. I know, I've been there and done that.

In no particular order, the following are major elements of risk that must be managed to some extent in every church or ministry, no matter how large or small, and those that all church leaders should carefully think about and plan for. We will revisit each, one at a time, in future posts:

• The church's legal and corporate existence (hint: do an audit before you really have to)
  
• Financial health (hint: establish an effective policies and procedure infrastructure)
• Church's contract(s) with its ministry personnel (hint: decide if this is right for you)
  
• Church-specific Constitution/Bylaw (hint: think long and hard about what you will include)
  
• Summer Camps (hint: what precautions are needed and are you insured?)
• Youth Ministries (hint: are you doing background checks on youth workers?)
  
• Children's Ministry Guidelines (hint: this is one of the biggest areas of risk)
• Child Abuse Reporting Guidelines (hint: you must know exactly what to do, or face consequences)
• Christian Conciliation and Alternative Dispute Resolution (hint: decide to require this from all staff and employees to avoid future litigation)
• Appropriate Insurance Coverage (hint: failure to properly insure may be grounds for imposing personal liability on leaders)
• Board and Staff Training (hint: another large area of risk because it's ripe for abuse)
• Volunteerism, Screening, Training and Supervision (hint: huge area of risk because poor training and lack of control spell potential trouble)
• Policies on Avoiding Defamation (hint: know what to say or not say, when, how and to whom)
  
• New Church Start-ups (hint: to most critical time to consider all these issues)
• Church Polity (Denominational Structures) (hint: best to think it through from the outset and not when you're on the courthouse steps)
• Formation of Conventions and Associations of Churches (hint: how will you protect all these relationships and what they stand for?)
• Formation of Integrated Auxiliaries and Support Organizations (hint: how will they function and be overseen, and how will they benefit the church?)
• Association & Affiliation Agreements (hint: if you have one, was it drafted by a competent professional?)
• Legal and/or Religious Authority in the Church (hint: if you don't establish it now, it may be decided for you later)
• Ecclesiastical Tribunals (hint: will their authority extend beyond spiritual/religious?)
• Missions Societies (hint: how will funds be handled, distributed and accounted for?)
• Church-Owned & Leased Property (hint: are there other tax issues involved? What about insurance?)
• Ordination & Parsonages (hint: can you current practice subject ministers to possible audits?)
• Clergy & Social Security (hint: do you know what you need to know?)
• Special IRS Tax Benefits for Clergy (hint: are you maximizing them or losing out?)
• Pastoral Counseling (hint: when are you going beyond where the law protects you?)
• Clergy-Penitent Privilege (hint: what should you know about his?)
• Clergy in Church Administration (hint: how do you go from pastoral ministry to administration, and what does it practically mean?)
• Benevolence Funds (hint: you can get in trouble with lousy practices)
• The Church Audit Procedures Act (hint: how to use it to your advantage)
• Religious Publishing & the Commerciality Doctrine Music Licensing (hint: what should you know about this area?)
  
• IRS Section 501(c)(3) Tax Exemption (hint: if this is right for you, you do you get it and keep it?)
  
• State Tax Exemptions (income, franchise, sales, use personal and real property taxes) (hint: learn how to take advantage of these)
  
• Board Governance and Fiduciary Duties (hint: are for-profit corporate standards being applied to nonprofits and churches?)
  
• Board Committees (hint: know what they do and what their protocol should be)
  
• Corporate and Organizational Structures (hint: think it through now before it becomes unwieldy)
  
• Subsidiaries and Affiliates (hint: how can you use them to advance your purposes?)
  
• Financial Accountability and Executive Compensation (hint: how do you avoid running afoul of reasonable compensation and independent decision-making rules?)
  
• Title VII and Discrimination (hint: how does it apply to churches and can it benefit you?)
  
• Private Inurement & Private Benefit (hint: perhaps the largest area of concern, if not the most costly. It's a matter of integrity before the Lord)
  
• Excess Benefit Transactions & Intermediate Sanctions (hint: what are the costs?)
  
• Employee and Volunteer Expense Reimbursements (hint: learn to do it right and not over do it)
  
• Disqualified Persons & Conflict of Interests (hint: O.K., are you getting the message?)
  
• Employee Hiring, Evaluation, Discipline and Terminations
• Employee Manuals
• Employee vs. Independent Contractor Rules
• Employment and Severance Agreements
• Background Investigations
• ADA, COBRA and Employee Benefits
• FMLA, FLSA and OSHA
• Gifts to Employees and Taxation
• Sexual Harassment Policy
• Workplace Substance Abuse Prevention
• Unrelated Business Income Tax
• State & Federal Taxation
• Fundraising & Charitable Solicitation
• Gifts & Contributions
• Scholarship & Research Gift Programs
• Trademark, Copyright & the Fair Use Doctrine
• Records Retention Guidelines
• Nonprofit Lobbying and Political Activity
• Nonprofit Disclosure Rules Protecting, Exploiting, and Licensing an Intellectual Property Portfolio

Stay with me as we examine these issues in future posts.