9 - 1Copyright 2008, The National Underwriter Company Business and Business Activity Insurance  What is it?  Business  Trade, occupation or profession  Includes farming, and services performed for others for a fee  Does not include part time activities performed by a minor  Courts – business involves two elements  Continuity or recurring character of activity  Profit motive  Homeowners policies do not provide liability coverage for bodily injury or property damage arising out of or in connection with a business engaged in by an insured Chapter 9 Risk Management For Financial Planners

9 - 2Copyright 2008, The National Underwriter Company  The personal auto policy and business use  Policy does not allow for personal vehicle to be used as “Livery Conveyance”  Held out to the public for hire  Provides liability coverage for bodily injury to a domestic employee  Does not preclude coverage if the insured occasionally drives a company car or rents a car for business Chapter 9 Risk Management For Financial Planners Business and Business Activity Insurance

9 - 3Copyright 2008, The National Underwriter Company  The personal auto policy and business use (cont’d)  Fellow employee exclusion (Business auto policy)  Excludes coverage if, while in the course of employment, one employee negligently injures another  Example – Two employees make a business call together in insured’s personal auto  Commercial policy will not respond – insured's personal auto policy will Chapter 9 Risk Management For Financial Planners Business and Business Activity Insurance

9 - 4Copyright 2008, The National Underwriter Company  The homeowners policy and business activities  Some will limit coverage for property used for any business purpose to  $2,500 while on the insured’s premises  $250 while the property is away from the insured’s premises  Some business activities can be covered by endorsements to the homeowners policy  Permitted incidental occupancies  Incidental to the use of the dwelling as a residence  No liability for anything other than bodily injury and property damage Chapter 9 Risk Management For Financial Planners Business and Business Activity Insurance

9 - 5Copyright 2008, The National Underwriter Company  Home based businesses  Endorsements provide coverage  Effectively function as complete policies  Do not provide for specialty coverages  Errors and omissions coverage  Workers compensation  Eligibility requirements  Business must be owned by the insured  Types of Business (varies by insurer)  Office  Service  Sale of tangible products Chapter 9 Risk Management For Financial Planners Business and Business Activity Insurance

9 - 6Copyright 2008, The National Underwriter Company  Home based businesses (cont’d)  Eligibility requirements (cont’d)  Types of Business (varies by insurer) (cont’d)  Sale of craft operations  Making and selling consumable products  Bed and breakfasts  Property coverage  Business property  Structures on the property used for the business  Property of others in the insured’s care  Valuable papers and records Chapter 9 Risk Management For Financial Planners Business and Business Activity Insurance

9 - 7Copyright 2008, The National Underwriter Company  Home based businesses (cont’d)  Liability coverage  Bodily injury or property damage  Personal and advertising injury  Slander  Libel  unintentional use of another’s advertising idea or copyright infringement  Loss of income arising out of a covered loss  Workers compensation & professional liability are not included Chapter 9 Risk Management For Financial Planners Business and Business Activity Insurance