“Did I Tell You I Have a My Own Business at Home?”

As an insurance agent, you want to make sure that your clients have the coverage for every foreseeable loss that could affect their financial future. Most people know they should have homeowners, renters, or auto insurance, but they might not know that they need additional coverage if they’re babysitting or doing freelance contract work at home. In the last few years, there has been an increase in the number of home-based businesses. This trend has led to an added group of endorsements that focus on these loss exposures.

Home Business Insurance Coverage (HO 07 01)

Most business-related exposures are excluded or limited under the unendorsed homeowners form. The endorsement provides substantive increases in coverage for certain home business loss exposures. The home business must meet the following four criteria to be eligible for coverage under this endorsement:

  • It must be owned by (a) the named insured, or (b) a partnership, joint venture, or other organization that is composed only of the named insured and resident family members.
  • The business must be operated from the residence premises, which is primarily used and designed for private residential purposes.
  • The business can have up to three employees but cannot produce gross annual receipts over $250,000. Larger businesses need to be insured under the appropriate commercial coverage forms, such as the Business Owners Policy (BOP).
  • The business cannot involve the (a) manufacture, sale, or distribution of food; and (b) manufacture of personal care products and the sale or distribution of these types of products. However, the exception concerns a business involved in the sale or distribution of nationally recognized personal care products (e.g., Avon) manufactured by a reputable company.

This endorsement provides business property, business income, extra expense, personal liability, and medical payments coverage. Additional business property covered includes accounts receivables and valuable papers and records.

Business Pursuits (HO 24 71)

This endorsement may be attached to a homeowners policy to provide coverage for the liability of an insured arising out of business activities, other than a business of which the insured is sole owner or a partner. Eligible business pursuits include clerical office employees, salespersons, collectors, messengers, and teachers (who have the option of including liability coverage for corporal punishment).

Home Business Insurance Coverage (HO 07 01)

This endorsement is quite extensive, with the structure of a self-contained policy. It provides both property and liability coverage for losses related to a described business that is operated in the insured’s residence or other structure, such as an unattached garage, that is located on the residence premises.

Home Day Care Coverage Endorsement (HO 04 97)

This endorsement provides modest property coverage as well as day care liability protection. If your insureds care for children or the elderly in your home, they need this specialized coverage.

Special Computer Coverage (HO 04 14)

This endorsement provides coverage for computers on a “broad peril” basis (subject to some exclusions—and there is no business exclusion) instead of a named peril basis if your insured’s work depends on technology.

Want to know more about ways to cover your clients’ home businesses? Check out our  Homeowners Insurance Made Simple in our Insurance Continuing Education Course Catalog at www.fastrackce.com.

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What is a Work-Related Injury?

insurance continuing educationWorkers’ compensation benefits are provided if the injury, death, or disease arises out of and in the course of employment. Where coverage applies depends on where the employee works.

  • If an employee has a fixed place of employment, benefits will be provided for injury, disease, or death while at that location.
  • If an employee, such as a salesperson, has no fixed location, the employee may be covered from the time he or she leaves home until he or she returns home.
  • When a traveling employee checks into a hotel, motel, or into another temporary residence, he or she establishes a “home away from home.” When the employee checks into the temporary residence, he or she is considered to have left the work environment. When the employee begins work each day, he or she re-enters the work environment.
  • Benefits may be available to an employee while not working if the activity is construed as promoting the employer’s goodwill and interest.

The courts have distinguished between work-related injury versus illness and recreational injury. Let’s look at some examples.

Workers’ Compensation Scenarios

William is employed by ABC Construction Company. While working on a new building, William falls from a ladder and breaks his leg. Because the injury occurred while William was performing his job, ABC’s workers’ compensation insurance carrier will cover the medical bills and lost wages from this incident.

Two years later, William is playing in a baseball game at ABC’s annual picnic. He breaks his leg sliding into home plate. This time, the injury arose outside the course of employment; therefore, the workers’ compensation insurance carrier will not cover the loss.

ABC Construction Company holds a charity event to raise money for the local hospital. The owner tells William he must volunteer to sell tickets for one the carnival rides that will be at the event. While he is setting up a booth, William breaks two bones in his left hand when the booth falls on him. ABC’s workers’ compensation insurance carrier will cover the medical bills and lost wages from this incident because the activity is construed as promoting the employer’s goodwill and interest.

Limitation on Benefits

The individual state laws may limit the amount of benefits that employees are entitled to receive to compensate them for their work-related injury or illness. Each state has its own rules for how an injury should be compensated. Some states have a list that affixes a dollar amount for the type of injury. Other states mandate that compensation is based on a scale or rating of injuries or disabilities.

Want to know more about workers’ compensation? Check out our Workers’ Compensation Made Simple in our Insurance Continuing Education Course Catalog.

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Long-Term Care Benefit Triggers

When LTC policies were introduced, insurers frequently required at least three days of prior hospitalization or skilled nursing home stays before the LTC policy benefits were “triggered.” Although most LTC policies require a physician’s certification that nursing home care is required because of illness, injury, or medical emergency, most polices no longer require hospitalization.  Continue reading

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Home-Based Business Exposures

The United States has experienced a rapid growth in home-based businesses in the past decade. The Insurance Information Institute reports that there are more than 11 million home-based businesses in the country, a figure that is expected to rise in the coming years. A survey by AAIS, however, found that a majority of these businesses do not have the proper insurance coverage.   Continue reading

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Life Insurance in Action

insurance continuing educationAs a life insurance agent, you know that people have different characteristics, different situations, and different needs. Consequently, the type and amount of life insurance necessary to meet these different needs will vary, depending on the situation of the individual or family. The products and services the life insurance industry offers meet a need and that is constant and continuous. In the final analysis, people buy life insurance because it minimizes the economic hardships of death and enables them to accomplish through mutuality and cooperation what they could not accomplish alone as individuals. Continue reading

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