Our Church Is Starting a Building Project — What Changes on Our Insurance?

Tell your agent before you sign the construction contract — not when the building is done. A church building project changes your insurance in four places: who insures the structure while it’s being built, your liability with contractors on the property, how your existing buildings are covered during the work, and your property limits once the new space opens.

Here’s how it usually goes. A church in Cherokee County has spent three years raising money for a family life center. The board approves the general contractor, the pastor breaks ground on a Sunday afternoon, and eleven months later the administrator calls the agent to “add the new building.” By then, the church has spent most of a year with a half-built structure, a dozen subcontractors, and a sanctuary running on a construction site — and nobody has looked at whether any of it was insured.

None of that is hard to get right. It just has to happen at the beginning.

Before the contract: the conversation that matters most

The best time to call your agent is when you have a contractor in mind and a contract you haven’t signed. The agent can then tell you what the contract should require of the builder, what your church needs to buy itself, and what changes on your existing policy — before any of it is locked in.

Bring your agent five things:

The draft construction contract — especially the insurance and indemnity sections.
The budget and scope — total cost, square footage, whether it’s a new building, an addition, or a renovation.
The schedule — start date, expected completion, whether the church keeps using nearby buildings during the work.
The general contractor’s name — so the agent can ask for their certificates before the first truck arrives.
The lender’s requirements, if there’s a construction loan — the bank will have its own list.

Ask for the answers in writing. A building project is exactly the kind of thing where “we talked about it” isn’t enough a year later.

Who insures the building while it’s being built?

A building under construction is not covered by your existing church property policy. It’s insured by a separate coverage — usually called builder’s risk or course-of-construction — bought by either the contractor or the church. The construction contract says which. Your job is to make sure someone actually bought it and that the church is named on it.

Builder’s risk typically covers the structure as it goes up, materials on site, and materials in transit or in temporary storage, against fire, wind, theft, vandalism, and similar losses. It usually runs from groundbreaking to the day the building is finished and occupied. A few things to check:

Who buys it. If the contract puts it on the general contractor, get a copy of the certificate and confirm the church is listed. If the contract puts it on the church, your agent places it — and it needs to be in force before work starts, not after.
The limit. It should match the completed value of the project, including materials the church buys directly. Large projects that run long may need the limit adjusted.
What isn’t in it. Builder’s risk policies commonly exclude things like faulty workmanship, design errors, and the contractor’s own tools and equipment. Those belong to the contractor’s other policies.
Soft costs. If a covered loss delays completion, the church may face extra interest, permit fees, or rental costs. Some builder’s risk policies cover these; ask.

The church-side habit to build: no certificate, no groundbreaking.

Contractors on your property: certificates and additional insured

Every contractor and subcontractor working on your property should provide a certificate of insurance showing general liability and workers’ compensation before they start, and the general contractor’s liability policy should name the church as an additional insured. This is the single most common thing churches skip, and it’s the one that costs the most when a worker is hurt.

Why it matters in Georgia: if a subcontractor without workers’ compensation coverage has an employee injured on your property, that worker’s claim can travel up the chain to the next party who does carry it — potentially your church. A current certificate from every trade on the job is how you keep that from happening.

Three habits that make this manageable for an administrator who has fourteen other things to do:

Collect certificates before work, not after. Make it a condition in the contract and a line on the pre-construction checklist.
Ask for “additional insured” status on the general contractor’s liability policy. It means their insurance defends the church if someone sues over the contractor’s work.
Have the indemnity clause read. Some contracts quietly shift the contractor’s risk back onto the owner. Brotherhood Mutual policyholders can send the contract to Legal Assist for review.

Your existing buildings during the work

Construction changes the risk on the buildings you already have. Many property policies restrict coverage when a building is vacant for more than a set period — often 60 days — and some condition coverage on fire alarms or sprinklers staying in service. Renovation work disables both routinely. Tell your agent which buildings go offline, and when.

Things worth flagging to your agent before they happen:

A building or wing that will sit empty while it’s renovated. Vacancy restrictions commonly reduce or remove coverage for vandalism, water damage, and theft after the vacancy period passes. Your agent can often arrange a vacancy permit or an adjustment for the construction period.
Alarms or sprinklers taken out of service. If your policy requires them to be working, tell the carrier before the contractor disconnects them.
Hot work — welding, torch cutting, roofing with open flame. It is a leading cause of construction-period fires. Your contractor should have a hot-work permit process; your agent will want to know it exists.
A congregation still meeting on the site. Fencing, signage, and a written plan for keeping people out of the work area are both a safety issue and a liability issue.

When it’s finished: the limit reset

The day the new building opens, it moves from builder’s risk to your church property policy — and it needs to be added at what it would cost to rebuild at today’s prices, not what it cost to build. Contents, equipment, and building-code-upgrade coverage need revisiting at the same time, and your lender will want a new certificate.

The checklist at completion:

Add the building at full rebuild cost, and revisit whether your other buildings’ values are still right while you’re at it — construction pricing tells you a lot about what a rebuild would cost.
Add the contents — AV systems, kitchen equipment, furnishings, playground equipment.
Check building-code-upgrade coverage. A new building raises the bar; make sure a future loss to an older building wouldn’t leave you paying to bring it up to code out of pocket.
Update your liability picture. A gym, a commercial kitchen, or a childcare wing changes what happens in the building — and what your agent needs to know.
Send the lender the new certificate.

If you’re a MinistrySure client, the finished building is added through your account manager; the new location form gets it started.

The questions to ask your agent

Ask your agent, before the contract is signed, who insures the building during construction, what the contract should require of the contractor, what changes on your existing buildings during the work, and what the limits should be when it opens — and ask for the answers in an email you can put in the project file.

Who buys the builder’s risk coverage — the contractor or us? Is the church named on it? What’s the limit?
What insurance does the contract require of the general contractor and the subs? Will you review the insurance and indemnity sections?
Which of our existing buildings will be affected, and what do we need to tell the carrier about vacancy, alarms, and sprinklers?
What does our liability policy say about a construction site on our property with a congregation still meeting?
When it’s done, what needs to change — limits, contents, code-upgrade coverage — and how fast can you send the lender a certificate?

Most of this is ordinary work for an agency that does it regularly. It only goes wrong when nobody is asked. If you’re not sure your current agent has been asked, our coverage-gaps check is a two-minute way to see what else is sitting in that category, and our page on church property insurance in Georgia covers how building values and limits are set in the first place.

Frequently Asked Questions

Does our church property insurance cover a building while it’s under construction?

Generally no. A building under construction is insured by a separate builder’s risk (course-of-construction) policy, bought by either the contractor or the church as the construction contract specifies. Confirm which party is responsible, that the coverage is in force before work starts, and that the church is named on it.

Who should buy builder’s risk insurance — the church or the contractor?

Either can. The construction contract assigns it. If the contractor buys it, the church should receive a certificate and be listed on the policy. If the church buys it, your agent places it before groundbreaking. What matters is that it exists, the limit matches the completed value, and the church is named.

Do we need certificates of insurance from every contractor on a church building project?

Yes. Every contractor and subcontractor should provide a certificate showing general liability and workers’ compensation before starting, and the general contractor’s liability policy should name the church as an additional insured. An uninsured subcontractor’s injured worker can look to the next party up the chain — potentially the church.

Does renovating our existing church building affect our insurance?

It can. Many property policies restrict coverage for buildings vacant beyond a set period and condition coverage on alarms and sprinklers staying in service — both common during renovation. Tell your agent which buildings go offline and when so the carrier can adjust coverage for the construction period.

When do we add the new building to our church insurance policy?

When construction is complete and the building is occupied, it moves from builder’s risk to your church property policy. Add it at full rebuild cost, add the contents, revisit building-code-upgrade coverage, update your liability information for new activities, and send your lender the new certificate.

Breaking ground this year? Bring the draft contract to a coverage review and we’ll walk through what needs to be in place before the first truck arrives — in writing. If we can’t help, we’ll tell you and stop.