Your homeowners policy, in general, covers only residential and recreational use of your property. The property section of the policy, however, typically provides some limited protection for business-related property: a maximum of $2,500 on the premises and $250 off the premises. You are able to recover up to these limits for theft or damage to the business property.
The liability section of the standard policy without special endorsements offers no coverage at all for personal injuries or medical costs stemming from business activities in your home.
Endorsements to Increase Your Business Use Coverage
You can purchase one or more of the following endorsements to provide some additional property or liability coverage for business activities at your home.
Business Pursuits Endorsement
The Business Pursuits Endorsement offers some liability protection for activities connected with certain occupations (e.g., teaching, clerical work, and sales). The business, though, must be located away from the residence. It can be useful if you have a home office or hold some business meetings at home, for instance. It doesn’t provide protection for other professional activities operated out of a home, such as medicine, architecture, or beauty services.
Caution: The teaching coverage doesn’t include horseback riding and other transportation activities such as driving instruction, aircraft piloting, and watercraft operation. The teaching coverage also doesn’t address liability for corporal punishment of pupils. You may purchase additional liability coverage for corporal punishment, though.
Permitted Incidental Occupancies Endorsement
The Permitted Incidental Occupancies Endorsement offers some liability protection for lawyers, accountants, physicians, and other professionals who work out of their homes. This endorsement doesn’t generally cover bodily injuries to students as a result of corporal punishment, or the insured professional’s employees.
Home Day Care Endorsement
If you are one of the many people who operate child or adult day-care businesses out of their homes, you should seriously consider purchasing a Home Day Care Endorsement. This endorsement, first of all, adds personal property used in the day-care business to the personal property covered under the $2,500 limit for business property in your homeowners policy. Second, it provides personal liability and medical costs coverage for most situations related to the day-care business.
Caution: In most cases, the personal liability and medical costs coverage won’t cover injuries to your day-care employee. It also won’t cover the unusual scenarios in which aircraft, watercraft, or saddle animals are involved in the injuries.
Endorsements for Farming Activities
You can purchase endorsements to cover liability arising out of farming activities at your home. If you dabble in farming but don’t rely on it as your primary source of income, you can purchase an Incidental Farming Personal Liability Endorsement. For an additional cost, you can add protection for activities away from your residence, such as animal grazing and boarding. If farming is a major source of income, you can purchase a Farmers Personal Liability Endorsement, which deletes the standard liability coverages and exclusions sections that don’t provide farming coverage, and substitutes analogous sections that address farming activities.
Increased Limits on Business Property Endorsement
If you find that the $2,500 on-premises and $250 off-premises business property coverage limits aren’t adequate for your situation, you can purchase an Increased Limits on Business Property Endorsement. This endorsement permits you to increase, by $2,500 increments, your on-premises limit up to a maximum of $10,000. The off-premises limit goes up by $250 for each $2,500 increase in the on-premises limit.
Caution: This endorsement doesn’t apply to a full-time business you operate out of your home. For example, if you operate a beauty salon out of your home, you can’t obtain this business coverage. If you have a business elsewhere and bring business equipment home from time to time, you can take advantage of these increased property coverage limits. This endorsement also doesn’t provide increased property protection for property in storage or held as samples.
If you have questions, contact the experts at Henssler Financial:
- Experts Request Form
- Email: experts@henssler.com
- Phone: 770-429-9166
Disclosures: The following information is reprinted with permission from Forefield, a division of Broadridge Financial Solutions, Inc. This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
