How should a church handle a lawsuit not covered by insurance?

Nonprofit and Church Legal Trends - Free Edition - January February 2009 (free edition)

How should a church handle a lawsuit not covered by insurance and should they use the insurance attorney assigned them if they are covered?

Many lawsuits and legal claims will be covered by your church insurance policy. If so, then your insurer will provide your church with an attorney to defend you. You will have a limited role in the selection process; however, you may be able to select a qualified attorney who will either accept the remuneration that the insurer offers or that amount with the church/nonprofit making up the difference. Clearly, you need someone who knows the substantive law, understands and can communicate clearly with your church/nonprofit, and who will give you quality legal representation. If you are sued, or threatened with a lawsuit by an attorney, you should immediately turn the lawsuit or correspondence over to your attorney and, perhaps, ultimately to your insurer to determine if it is a covered claim.

If a lawsuit or legal claim is not covered by your insurance policy, then you need to quickly hire an attorney to represent you. Ordinarily, an answer to a lawsuit must be filed within 21-30 days after it is served, so you will not have much time. This is especially critical when your insurer spends several days evaluating coverage and concluding that the claim is not covered under your insurance policy. If you are looking for an attorney to assist with a specific legal issue, contact other churches or Christian attorneys in your community to see if they have used an attorney for a similar issue, and, if so, ask for their evaluation of their attorney. You may also consult with the Christian Legal Society for an appropriate referral in your area (www.CLSnet.org)