Sharing your facility is good stewardship. An empty building six days a week serves nobody, and rental income steadies a tight budget. But every outside group that walks through your doors brings risk with it — and by default, that risk lands on your policy and your loss history.
Here is how to say yes without absorbing someone else's exposure.
1. Require a written facility-use agreement — every time
One page is enough. It should state:
- Who is using the space, for what, and on which dates and times.
- Which rooms and equipment are included, and which are off limits.
- Who is responsible for setup, cleanup, and damage.
- A hold harmless and indemnification clause in your favor.
- Insurance requirements (below).
- Rules on alcohol, open flame, minors, cooking, and amplified sound.
Verbal agreements with long-standing groups are the ones that cause problems. Grandfather nobody.
2. Require a certificate of insurance naming you
Ask for a certificate of insurance showing:
- General liability of at least $1,000,000 per occurrence.
- Your organization listed as an additional insured for the event or term.
- Coverage dates that span the entire period of use.
If the group works with minors, ask for abuse and molestation coverage on their own policy. If they serve alcohol, ask for host liquor or liquor liability.
For one-off private events like weddings and receptions, one-day special event insurance is inexpensive — often $100 to $200 — and widely available online. Making it a condition of booking is normal and expected.
3. Know which uses change your own policy
Some arrangements are not "rentals" at all in an underwriter's eyes; they change your risk profile and must be disclosed to your carrier.
- A day care or preschool operating in your building, whether you run it or not.
- A school, including a home-school co-op meeting regularly.
- A second congregation holding weekly services.
- A commercial tenant paying rent — this can affect your property coverage and, in some states, your property tax exemption.
- Overnight use, including shelters and youth lock-ins.
Failing to disclose a regular occupancy is the kind of omission that surfaces at claim time. Tell your agent; it is nearly always cheaper than the alternative.
4. Walk the building the way an adjuster would
- Are stairs, ramps, and walkways lit and in good repair?
- Is there a clear, posted exit plan?
- Are kitchens equipped with a fire extinguisher and, if used commercially, a suppression system?
- Are children's areas separated with line-of-sight visibility?
- Is anything stored in front of an exit or an electrical panel?
5. Set money aside for wear, not just for disaster
Facility use accelerates wear on flooring, restrooms, HVAC, and parking areas. A modest maintenance reserve funded from rental income prevents the slow deterioration that eventually shows up as a claim — or a coverage restriction at renewal.
6. Keep the paperwork where the next person can find it
Certificates, signed agreements, and correspondence should live in one folder — physical or digital — that survives a change in staff or board. When a claim arrives eighteen months later, that folder is the difference between a fast resolution and an expensive one.
The short version
Say yes to the community, and make the paperwork boring and routine: a signed one-page agreement, a certificate naming you as additional insured, and a phone call to your agent whenever an outside group becomes a regular occupant.
Not sure whether your current policy contemplates the groups already using your building? Send us your declarations page. The review is free and takes about one business day.
This article is general information, not insurance or legal advice. Coverage terms vary by policy, carrier, and state — talk with a licensed agent about your business.