When the church kitchen predates World War II or the basement no longer keeps Christmas items dry, a ministry may be tempted to act as its own general contractor to save money on costly remodeling or repair jobs. Before assuming this role, church leaders need to understand the risks associated with construction project management. What seems like a prudent, money-saving idea, can have costly results.
General contractors do more than just supervise a construction project. They are licensed professionals who require expertise and skill in all facets of construction, such as:
Because supervising a construction site involves so many moving pieces, liability is a concern. “A general contractor risks being sued anytime property is damaged or a worker or third party is injured,” says Stephen Case, an associate attorney for Brotherhood Mutual with experience in construction defect and injury litigation.
Who is ultimately responsible for worksite injuries? General contractors generally assume an overall duty of responsibility on project sites. State laws vary widely, but a ministry that assumes a general contractor’s role could be held liable for accidents or workers’ compensation involving contracted workers. Subcontractors’ insurance typically covers only their workers—and not the ministry.
A ministry also could be held liable for vandalism or theft of construction equipment, or even accidents involving volunteers. Case cautions that using volunteer labor on construction sites can pose dangers to the volunteers and the ministry, especially if the volunteers are not well trained for the work. It’s important that your ministry’s activity participation agreement includes liability waiver language for volunteers.
Ministries acting as their own general contractor are especially vulnerable when a third party is injured on the jobsite. It doesn’t matter whether the injury is an act of God or the negligence of the ministry or subcontractor. Case says, “In my experience, if someone is injured, the owner of the property and anyone involved in the work will typically be drawn into the lawsuit.”
General contractors generally assume an overall duty of responsibility on project sites. State laws vary widely, but a ministry that assumes a general contractor’s role could be held liable for accidents or workers’ compensation involving contracted workers.
Depending on the project, the person in your ministry appointed to coordinate the work could spend up to 30 hours per week or more on phone calls and progress checks, in addition to securing building supplies, equipment and permits. The ministry needs to decide if this kind of intensive involvement will conflict with the employee’s regular duties.
Ministries also should carefully consider whether acting as their own general contractor will actually save money. Subcontractors often give discounts to licensed general contractors who work with them on a regular basis, and bill their normal fee for direct customers. Evaluate if the direct-to-church cost charged by the subcontractor is substantially less than the mark-up cost a general contractor would charge your ministry. Once the value of a church employee’s time is factored into the equation, hiring a general contractor may likely be the more cost-efficient option.
General contractors typically bear the burden of ensuring a project is completed properly. Meeting city inspectors, responding to code violations, addressing failed building inspections, paying for reconstruction costs, and other problems could become the responsibility of the general contractor. “When the work is of a larger scale, or more technical in nature, there is a greater risk of liability for an inexperienced lay general contractor,” Case says. Meet with an insurance agent before starting any construction project to discuss what your policy covers, and which additional coverages may be needed.
Thank you for your interest in Brotherhood Mutual. We appreciate the opportunity to provide your church or other ministry with an insurance quote and will reply to your request as soon as possible.
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