Mortuaries tend to be small, family-run, unique businesses. In many cases the term “mortuary” is synonymous with “funeral home,” but some mortuaries and funeral homes differ based on the types of services they provide.
Whether you offer basic mortuary services or are a full-service funeral home, one-size-fits-all business insurance is not the right answer for any mortuary. Your exposures are not the same as 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 mortuary insurance from reputable insurance companies.
You need coverage tailored to the services you provide, whether you provide full-service funeral home and funeral director services, and on-site crematory services.
Why Do You Need Mortuary Insurance?
According to the Small Business Development Center:
- There are 21,080 funeral homes/mortuaries in the United States that employ approximately 105,668 individuals
- Nearly 89% of funeral homes/mortuaries in the US are privately owned by individuals, or closely held private corporations
- The funeral service industry generates $11 billion in revenue each year
Although there are slight differences between a funeral home and a mortuary, they are very similar in that both care for and prepare a decedent for burial or cremation. Mortuaries are responsible for preparing and filing the necessary paperwork with the county and/or state in order to proceed with the processes of burial or cremation. Some mortuaries function just like a funeral home, while many are more focused on mortuary sciences, including caring for and preparing the body for burial or cremation.
Funeral services offered by mortuaries may be somewhat less extensive or comprehensive than some funeral homes. These mortuaries may offer fewer services at a lower cost. Only mortuaries offer on-site cremation services, and usually involve the services of a funeral director.
Mortuaries face certain risks that can have a devastating impact on their financial viability. These include:
- Slips and falls
- Weather events (wind, hail, etc.)
- Fire and smoke
- Theft and vandalism
- Employee injuries
- Auto accidents involving hearses or other owned vehicles
Basic Mortuary Insurance Coverage
While you need a set of basic mortuary insurance policies, each of these must be tailored to your unique business.
Commercial general liability (CGL) insurance is a necessity for mortuaries. It provides coverage for costs related to third party property damage or bodily injury that occurs on your premises, or that is caused by you or one of your employees in the course of doing business. For example:
- A mourner trips and falls on a rug inside the funeral home, or on a crack in your parking lot
- An employee damages a customer’s vehicle while maintaining your 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.
Mortuaries also need property insurance to protect the funeral home building, as well as the contents of your building, including fixtures, furniture, office equipment, crematories, embalming equipment, and more. Commercial property insurance helps you replace or repair damaged or destroyed property in the event of a covered loss, 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:
- Valuable art
- Specialized equipment for embalming and corpse preparation
- Coffins and other merchandise for sale or display
- Crematory equipment
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.
Mortuaries may be eligible for a special business insurance package called a business owners policy, or BOP. A BOP provides mortuary liability insurance, mortuary 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 for Mortuaries
If your mortuary offers full funeral home services and funeral director services, you may need additional liability protection in the form of endorsements to your CGL policy, or several stand-alone policies.
- Directors’ and officers’ (D&O) liability insurance: This 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:
- Unlawful acts
- Erroneous investment decisions
- Failure to maintain property
- Releasing confidential information
- Hiring and firing decisions
- Conflicts of interest
- Gross negligence
- Professional liability insurance: Also known as errors and omissions insurance, this 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.
Crematories need business insurance in the event that someone is injured on their property (family members, delivery people, maintenance workers, employees), or that an error or other problem occurs during the cremation process.
Families may sue crematories for a variety of reasons. What if remains were improperly handled? What if you do not handle a deceased person’s remains according to the family’s wishes? You are exposed to lawsuits everywhere you turn.
- Commercial general liability (CGL) insurance: This protects crematories from a wide range of potential liability claims or lawsuits by third parties. If some type of bodily injury (a delivery person slips and falls on your premises) or property damage (you fail to remove a piece of valuable jewelry from a deceased person before cremation) occurs on your premises, the injured party — customer, vendor, delivery person, etc. — can sue you for damage. CGL insurance covers costs related to these lawsuits, including legal fees, settlements or judgments, and court costs. It also covers claims of advertising liability, slander, and libel.
- Professional liability insurance: Also known as errors and omissions insurance, this may pay if you are sued for mistakes, oversights, or failure to deliver services as promised.
- Workers’ compensation insurance: This is to protect employees from on-the-job injuries. Crematory employees work in a dangerous environment, making them susceptible to all kinds of injuries, including burns, lost limbs, slips and falls, heavy lifting injuries, and more. Workers’ compensation insurance covers the cost of work-related injuries and illnesses, including medical bills and lost income for the injured workers.
- Commercial property insurance: Crematories need this to cover buildings and their contents. A crematory will have a significant fire exposure, as well as typical property exposures such as weather events, vandalism, and theft. Commercial property insurance covers the costs of making repairs and replacing damaged or destroyed property after certain covered events.
- Business interruption insurance: This provides coverage for business expenses and lost income if you are forced to temporarily close your doors to make repairs after some type of covered loss. Be sure to talk to your independent insurance agent about any special coverage you might need for cremation equipment and any other heavy machinery that you use in your business.
Protect Your Hearses and Other Vehicles with Commercial Auto Insurance
Driving is a huge part of your business as a mortuary owner. You may have a fleet of vehicles including everything from hearses to cargo vans, trucks, and even passenger cars. All of these need insurance protection for the vehicles themselves and for the drivers.
Commercial auto insurance: This 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:
- Vehicles that your mortuary owns
- Vehicles that your mortuary owns, hires, or leases
- All vehicles that are used for business purposes, including those that the mortuary does not own, hire or lease (e.g., when you or your employees drive your own personal vehicles 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 Mortuary Insurance Policies
In addition to basic mortuary business insurance, you should discuss with your independent insurance agent the following types of insurance that you might need.
- Commercial umbrella insurance: Also known as excess liability coverage, this provides supplemental liability protection beyond the limits of certain other liability policies.
- Environmental liability insurance: This may be needed if you use and dispose of certain chemicals, medical waste, or other pollutants.
- Employment practices liability insurance: This covers you if an employee sues you for discriminatory employment practices.
Work with your independent insurance agent to determine if you need coverage for:
- 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 Much Does Mortuary Insurance Cost?
Mortuary insurance costs will vary depending on the size of your business, the number of employees you have, they types of services you provide, and the value of your business property (buildings, art, equipment, etc.). If you have multiple locations, you’ll pay more for insurance than a mortuary with a single location. Other factors such as the crime and weather risk in your area, and more, also impact the cost of business insurance for mortuary.
An independent agent who has experience working with mortuaries can help you decide the types and amounts of coverage you need for your business. The choices you make will determine your cost of coverage.
Find and Compare Quotes
An independent agent can work with you one-on-one to determine the types and amounts of coverage you need. Your agent can get quotes from multiple insurance companies so you can evaluate the cost and coverage options and make the best choice.
Benefits of an Independent Agent
Our agents simplify the search process for finding the right mortuary insurance. They’ll walk you through the handpicked policy options and explain the details.
Most importantly, they’ll be there for you when claim time comes. They know the ins and outs of the process and will make sure your claim is handled appropriately.
The Lowdown on Online Quotes
Online quotes can be tempting. They are fast and easy to get — but are they accurate? And are you getting quotes for the right coverage? For business owners, choosing speed over accuracy can cost you.
Online quotes can’t and don’t see the whole picture. They can omit important coverage that will leave you devastated if something unexpected happens. And they can leave out cost-saving opportunities that an agent can help you take advantage of.
Instead of getting an online quote, find an independent insurance agent now, and get one-on-one consultation and affordable options for the best coverage for your unique needs.
TrustedChoice.com Article | Reviewed by Paul Martin
©2021, Consumer Agent Portal, LLC. All rights reserved.