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Personal Insurance: Home Insurance


Business Use - How does my Homeowners policy define 'business'?

Words in an insurance policy that are printed in bold type indicate that the word has a special meaning that is listed in the DEFINITIONS section of the policy. “Business” is a specifically defined term in most Homeowners insurance policies and is typically defined as...

DEFINITIONS, B. 3. “Business” means:

a. A trade, profession or occupation engaged in on a full-time, part-time or occasional basis; or
b. Any other activity engaged in for money or other compensation, except the following

1. Volunteer activities for which no money is received other than payment for expenses incurred to perform the activity
2. Providing home day care services for which no compensation is received, other than the mutual exchange of such services
3. The rendering of home day care services to a relative of an “insured”.


As you can see, Business is very broadly defined and even includes minor activities such as hobbies where any amount of money is expected to be earned. There are very few exceptions to the Business definition.

This definition of Business is important to keep in mind in order to understand how the business exclusions in the property, liability, and medical payments sections of a Homeowners policy may apply to you.

Homeowners policy references are from the unendorsed ISO HO-3 Special Form policy, 01-00 edition. The “Business” definitions may vary somewhat from company to company and state to state. Read your policy.

For a list of related questions see:
Does my Homeowners policy exclude business activities?

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