“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.

This entry was posted in Insurance. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *