Funeral homes tend to be small, family-run, very unique businesses. Many are integral parts of their communities; families of all kinds place their trust in funeral homes during the worst of times. Funeral homes and funeral directors need comprehensive small-business insurance to protect them from financial ruin caused by fires, weather events, injuries and lawsuits.
One-size-fits-all business insurance is not the right answer for a funeral home or funeral director. Your exposures are not the same those of a retail shop, manufacturer or any other small business. You need to work with an experienced independent insurance agent who knows your business and who can find the right funeral home insurance from reputable insurance companies.
According to the National Directory of Morticians Redbook:
- there were 19,391 funeral homes in the U.S. in 2015.
- nearly 86 percent of funeral homes in the U.S. are privately owned by individuals or families.
- 14 percent of funeral homes in the U.S. are owned by publicly traded corporations.
- the average funeral home has three full-time and four part-time employees.
As you serve bereaved members of the public, you face certain risks that can have a devastating impact on your financial viability. These include the following:
- Slips and falls
- Weather events (wind, hail etc.)
- Fire and smoke
- Theft and vandalism
- Employee injuries
- Auto accidents involving hearses or other owned vehicles
Funeral Home Insurance Core Coverage
Your business and the business down the street are not the same – even if the other business is also a funeral home. While you need a set of core funeral home insurance policies, each of these must be tailored to your unique business.
Commercial general liability (CGL) insurance is a necessity for funeral homes and funeral directors. It provides coverage for costs related to third-party property damage or bodily injury that occurs on your premises or caused by you or one of your employees in the course of doing business. For example:
- a mourner may trip and fall on a rug inside the funeral home or on a crack in your parking lot.
- an employee may damage a customer's vehicle while maintaining the funeral home grounds.
In these types of cases, your CGL policy will reimburse the injured party for medical expenses or the cost of the lost or damaged item. In addition, general liability insurance covers costs related to lawsuits, including court costs, attorney fees, and any settlements or judgments that you are required to pay. It also provides coverage for claims of advertising liability, slander and libel.
Funeral homes and funeral directors also need property insurance to protect the funeral home building as well as the contents of your building, including fixtures, furniture and office equipment. Commercial property insurance helps you replace or repair damaged or destroyed property in the event of a covered loss caused by an event such as a fire, weather event, theft or vandalism.
You likely have a variety of unique property on your premises that must be covered, including the following:
- Valuable art
- Specialized equipment for embalming and corpse preparation
- Coffins and other merchandise for sale or display
Discuss with your insurance agent how to cover these items. In addition, talk to your agent about property coverage for off-premises items, such as tents and chairs at cemeteries, lifts, radios, and other telecommunication equipment. These items need coverage while they are stationed off-premises as well as while they are in transit.
You must also ensure that human remains and any vessels that hold them are appropriately covered by your funeral home insurance plan.
Funeral homes may be eligible for a special business insurance package called a business owners policy, or BOP. A BOP provides funeral home liability insurance, funeral home property insurance and business interruption insurance in one convenient, affordable package designed for low-risk, small businesses. What’s more, you can add endorsements, riders and additional coverage to a business owners policy to ensure that it is fully tailored to your needs.
Special Funeral Home and Funeral Director Liability Coverage
Funeral homes and funeral directors may need additional liability protection in the form of endorsements to your CGL policy or several standalone policies.
- Directors and officers (D&O) liability insurance protects specific decision-makers (e.g., a board of directors or advisory committee) from legal judgments and costs arising from certain behaviors or decisions that they make. Without this coverage, these individuals’ personal assets could be at stake if they are sued for any of these actions:
- Unlawful acts
- Erroneous investment decisions
- Failure to maintain property
- Releasing confidential information
- Hiring and firing decisions
- Conflicts of interest
- Gross negligence
- Professional liability insurance, or errors and omissions insurance, is important for funeral directors in situations where a family of a deceased person claims that you have caused them financial harm due to negligence, errors or omissions. Even if the lawsuit is unfounded, your professional liability policy will help cover the costs to prove your case.
Protect Your Hearses and Other Vehicles with Commercial Auto Insurance
Driving is a huge part of your business as a funeral home or funeral director. You may have a fleet of vehicles including everything from hearses to cargo vans, trucks and even passenger cars. All of these vehicles, as well as the drivers, need insurance protection.
Commercial auto insurance provides liability, collision, comprehensive and uninsured/underinsured motorist coverage for your commercial vehicles. Your coverage should be based on how your vehicles are used in your business and who will be driving them. If you hire or lease your business autos or if you or your employees drive personal vehicles for business purposes, you may need additional or amended coverage.
Your commercial auto insurance policy should specifically cover the following:
- Vehicles that your business owns
- Vehicles that your business owns, hires or leases
- All vehicles that are used for business purposes, including those that the business does not own, hire or lease (e.g., a personal vehicle used for business purposes)
Each vehicle owned by the business or used for business purposes can be listed separately on your business auto policy, with corresponding coverage for each vehicle that can differ, depending on the vehicle’s characteristics and the coverage it requires.
Inquire About Additional Funeral Home Insurance Policies
In addition to basic funeral home business insurance, you should discuss with your independent insurance agent the following types of insurance that you might need:
- Commercial umbrella insurance, or excess liability coverage, provides supplemental liability protection beyond the limits of certain other liability policies.
Work with your independent insurance agent to determine if you need coverage for any of these items:
- Money and securities
- Employee theft and crime
- Loss of refrigeration
- Property of the deceased
- Valuable papers
- Signs and glass
- Floods and earthquakes
- Sewer backup
How to Find Funeral Home Insurance Tailored to Your Business
Like any small business, funeral home owners and funeral directors need a trusted adviser who can help them find the best insurance coverage to protect their livelihood from the many potential – and costly – problems that can arise. Whether it is dangers to the general public or your employees, or unforeseen events like fires, storms and theft, you need the right combination of coverage that addresses whatever you might be exposed to.
An independent insurance agent will get to know you, your family and your business. He or she can work with multiple reputable companies who specialize in funeral home insurance so you can have peace of mind as you take care of your customers in their time of need.