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Will Our Church Insurance Also Cover Our Daycare/Pre-K/School Program?
It’s an important question and one often misunderstood. Obviously there are a variety of programs (Pre-K, Daycare, Mother’s Day Out, Grade Schools, etc.) so for the purposes of this article, we’ll just refer to these organizations as a daycare knowing the same principal will apply regardless of the specific type of organization.
Many churches label a daycare that meets at their church, one they support or even one they promote on their website or otherwise, as one that is part of the church’s ministry. In many cases, that’s exactly what it is – in other cases, we’ve found that it’s really a separate entity utilizing church facilities. That’s where you need to be extremely careful. Often in those cases, it’s more of a lease arrangement between two parties and less a part of the church’s ministry. The distinguishing characteristics can fall into a “gray area”, never an ideal definition when it comes to know if an insurance policy will respond, so noted below are some basic questions when it comes to making the distinction.
- Does the church has authority over the daycare? In other words, is the daycare overseen and controlled by the church? In short, does the church have the authority to change the daycare’s program or even shut it down?
- If not, the daycare may be a separate entity.
- Does the daycare operate under the church’s board of directors, trustees, deacons?
- If the daycare has their own Board, they may be a separate entity.
- Does the daycare have a lease arrangement with the church?
- If yes, this may indicate the daycare may be a separate entity?
- Does the daycare pay their employees separate from the church?
- If yes, this could be an indication the daycare may be a separate entity?
- Does the daycare has their own 501c(3) filing?
- This is not often a distinguishing characteristics as it is permissible for a daycare to have their own non-profit filing.
- Does the daycare screening procedures match those of the church?
- This is not a distinguishing characteristic, but apart from the fingerprinting requirement by licensed daycares, the employee and volunteer screening procedures should absolutely mirror those of the church.
If there is the slightest doubt or slightest gray area surrounding the children’s program/daycare that meets at your church during the week, contact your insurance advisor to discuss this carefully. Should you ever have a claim, that is not the time you want to discover there might be a potential problem.