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Definitions and Property Coverages

Summary: Insurance Services Office (ISO) has developed a Home Business Insurance Coverage endorsement, HO 07 01 05 11 , that may be used to insure a home business. When this endorsement is attached to a homeowners coverage form, Section I provides coverage for the described business and for property of others in the care of the business. Coverage C special limits of liability are expanded, and additional coverages are added. Definitions are amended or added in accordance with the coverage provided.

Following is a discussion of the property coverages. Endorsements that modify property coverages are included at the end of this discussion.

Topics covered: Introduction Eligibility Definitions Property coverages Additional coverages Section I exclusions Section I conditions Endorsements

Introduction

The exponential use of instant messaging, email, and the Internet has made it possible for many persons to telecommute at least one day per week. Technology has also allowed many entrepreneurs to realize their own version of the American dream by starting their own businesses, particularly home-based businesses.

Many persons do not realize that the coverage under the typical homeowners policy is inadequate for covering both personal and business property. Further, there is very little coverage for any liability exposure arising out of business activities. For many of these persons, the coverage afforded by the home-based business coverage forms will adequately address their needs by giving additional coverage for property used in business, liability coverage for certain activities, and, importantly, business income coverage.

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