Buckets of Risk: Is Your Missions Organization Fully Covered?

When disaster strikes abroad, is your nonprofit truly covered? For many international ministries, the answer is sobering.

“Less than 10% [of missions organizations] are adequately insured,” according to Derek Gard of Bitner Henry Insurance Group. This alarming statistic highlights a critical vulnerability for organizations operating in the world’s most challenging environments.

Gard, who previously served as a missionary before entering the insurance field, emphasizes that many ministries are unknowingly holding “buckets of risk” that could be transferred to an insurance company, safeguarding their finances and, more importantly, the lives of their staff.

The Uncovered Crisis: A Real-Life Kidnapping in Haiti

The stark reality of inadequate coverage was brought home to Gard during a meeting with a ministry that had experienced a kidnapping in Haiti. Despite believing they had coverage, a critical Haiti exclusion in their policy meant the crisis response firm disengaged, demanding a retainer of $10,000 to $50,000 to continue their work.

“The ministry looked at that price tag and said, ‘No, we’ll just figure it out ourselves from here on out,'” Gard recounts. “So basically, at that point, they had to be their own hostage negotiators.” Tragically, one of the kidnapped individuals, a local national, did not survive. This harrowing incident underscores that insurance is not just about “words on a paper” but about “actual life and death.”

Common Gaps in International Coverage

While some ministries adequately insure their U.S.-based property and general liabilities and often carry directors and officers insurance, significant gaps frequently emerge in their international programs. Gard identifies five to six crucial coverage areas often overlooked:

• U.S.-Based Worker’s Compensation: Surprisingly, many U.S. ministries do not carry this, even when not legally mandated by the state. This leaves them vulnerable to significant payouts if a U.S.-based employee is injured during the course of their employment.
• Foreign Worker’s Compensation: This is arguably the largest uncovered financial risk for international ministries. U.S. expats working abroad often lack this crucial coverage, leaving them exposed to immense medical bills and lost wages in the event of an injury. Gard himself, as a former missionary, discovered he had no worker’s compensation while serving in the Dominican Republic.
• Kidnap and Ransom (K&R): Many ministries philosophically oppose paying ransoms, leading them to forgo this vital coverage. However, the primary benefit of K&R isn’t the ransom payment itself, but access to highly specialized crisis response firms. These firms act as security consultants, advising ministries, deploying on-the-ground staff, and facilitating rapid, strategic responses to abductions, disappearances, or political unrest. Without K&R, ministries face significant upfront retainers and the critical loss of time in a life-or-death situation. The average cost for a K&R policy for a ministry with 20-50 missionaries and $1 million in revenue can be as low as $2,000-$3,000 annually.
• Foreign Liability: U.S. liability policies often have geographic limitations and may not extend to all countries where a ministry operates, leaving them exposed to lawsuits abroad.
• Trip Insurance: Many organizations “pass the buck” by recommending individuals purchase their own travel insurance for short-term trips. However, if a participant is severely injured, the ministry will inevitably be looked to for assistance, potentially facing significant financial and reputational repercussions.

The Nuances of Overseas Risk: Scenarios and Solutions

The complexities of international insurance are further illuminated through various scenarios:

Medical Emergencies: A Heart Attack in Nepal

A gentleman on a mission trip in Nepal suffered a heart attack at high elevation. Due to having proper travel insurance, he was life-flighted by helicopter, then flown to Germany for in-flight surgery. This highlights the critical role of immediate access to emergency evacuation services.

Different types of personnel require different coverage:

• Local Nationals: Should rely on local state-sponsored health schemes.
• U.S. Expats/Third Country Nationals (Employees): Global expat health insurance is crucial, but these policies often require a local physician’s referral for advanced care or evacuation. This is where foreign worker’s compensation becomes vital, as it often includes an emergency evacuation component that can bypass these referral requirements, as seen in a case where a missionary in Eastern Europe with a severe infection was evacuated to Germany.
• Volunteers/Short-Term Personnel: Travel insurance is the most appropriate coverage.

The 1099 Fallacy

Many ministries classify their overseas workers as 1099 independent contractors, believing this absolves them of liability. However, as Gard points out, most often these individuals would not pass the IRS’s test for independent contractors and could be reclassified as W-2 employees in a legal dispute, entitling them to employee benefits. Furthermore, in many states, even 1099 contractors can file worker’s compensation claims against the organization if they are injured and do not carry their own coverage.

Natural Disasters: The 2010 Haiti Earthquake

The 2010 Haiti earthquake demonstrated the immense challenges of natural disasters, which can swiftly erode infrastructure and security. The key takeaway from such events is the critical importance of immediate evacuation capabilities. Insurance policies, particularly those with robust security evacuation components, prioritize those with existing contracts, providing crucial first-in-line access to limited resources and rapid transport out of affected areas.

It’s vital to note that “natural disaster” coverage is highly nuanced. Named storms (hurricanes, etc.) can be excluded from policies. A comprehensive program with overlapping coverages, like “shingling a roof,” is essential to prevent gaps.

Political Unrest: Post-October 7th Israel

Unlike natural disasters, which can trigger different policy responses, political unrest often relies on specific triggers for security evacuation coverage, such as a U.S. State Department or host country mandate for foreign nationals to leave. The events in Israel post-October 7th highlighted a gap: while Gaza had an elevated travel advisory, the rest of the country did not, meaning typical security evacuation policies wouldn’t trigger.

However, enhanced security evacuation coverage, often found within K&R policies, includes a broader trigger that allows for evacuation if the insured and the security company deem it in everyone’s best interest. This proactive approach saves lives and potentially reduces much larger future costs.

Your 5-Step Checklist to Audit International Coverage

To ensure your ministry is adequately protected, Derek Gard provides a crucial five-step checklist:

1. Know Your Risk: Conduct a thorough inventory of all your assets and exposures internationally. This includes properties, the locations of all your people (employees, volunteers, expats, local nationals), and every country in which you operate. You cannot insure what you don’t know you have.
2. Review Existing Policies for Gaps: Go through each policy line by line. Look for exclusions (like the Haiti exclusion) and geographic limitations. Ensure your coverage extends to all the countries where your people are working.
3. Engage with an Expert Broker/Agent: Not all insurance agents understand the complexities of international nonprofits. Seek out a broker with expertise in foreign liability, security evacuations, foreign worker’s compensation, and kidnap and ransom. They should tailor a program to your specific risks and operations.
4. Educate Your Leadership and Field Staff: It’s not enough to have the policy; your people need to know how to use it. Provide clear information on emergency contacts (like 800 numbers for evacuation), what’s covered, and what to do in a crisis. This knowledge can be life-saving.
5. Regularly Update Your Coverage: International ministries are dynamic. Staff move, programs change, and countries are added or dropped. Annually, sit down with your broker to review these changes and update your policies to reflect new risks, staff, and locations. Don’t let your coverage get stale.

By diligently following these steps, ministries can proactively identify and transfer potential “buckets of risk,” ensuring they are prepared for the unexpected and can continue their vital work with peace of mind.

Watch a video on Buckets of Risk here.