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Home Business Insurance Tips

Home Business Basics

Homeowner (HO) policies aren’t meant to insure businesses that are run out of a home. Premiums paid for homeowners coverage are for handling losses related to the ownership and use of a residence and related structures. Therefore, no liability coverage is available for business activities such as customers who slip and fall on your premises, damage to business property (owned or in your control), injury caused by things you make (products liability), or damage due to services that you promote or provide. It is also unlikely that an insurer would provide a legal defense against business related claims.

Generally, a HO policy does not provide workers compensation coverage for any employee. Medical expense and liability coverage may be available for workers who are ineligible for workers compensation, such as maids, butlers, or nannies, but such coverage only applies if an injury occurs while performing residential tasks.

Example: You send your nanny to deliver copies of your business proposal and, on the way to the client, she is seriously injured in a fall. Your policy won’t provide any medical expense coverage for your nanny because she was performing a business-related chore.

There is no coverage for detached garages, barns, or similar structures on your residence premises if they are used in whole or part for business.

Example: You store $3,000 worth of equipment and supplies that you use in your job in your garage and the garage burns down. The fire loss to the garage becomes ineligible because of its partial business use.

A basic HO policy may protect certain property. However, the coverage may be limited to as little as a few hundred dollars. Items qualifying for limited coverage include business personal property kept in or around your home, business personal property kept at a location other than in or around your home or landlord's furnishings. One way to improve your coverage is to add policy options that do the following:

  • increase the coverage limits for business personal property
  • cover garages and other buildings that are rented to others
  • protect electronic business equipment which is usually used in a vehicle while such equipment is located outside of a vehicle
  • provide theft coverage for landlord's property
  • acquire limited business personal property and liability coverage for an in-home daycare
  • cover a condo unit owners' liability for damage caused by renters
  • provide premises liability coverage (i.e. a customer slips and falls)

Please see the other parts in this series that discuss specific business situations.


COPYRIGHT: Insurance Publishing Plus, Inc. 2019

All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc.

 

Home Businesses (Offices) – Part 1

A variety of businesses are routinely operated in homes. This article discusses aspects of particular operations. Refer to part one for background information on coverage basics as well as our other parts discussing different businesses.

Sales Office

Usually a HO policy does not offer much protection for business property. In fact, available coverage may be up to only $2,500 for personal property used for business and kept on the residence premises. Further, no coverage applies to business property such as inventory, product samples, or items being held for delivery. Finally, even optional coverage excludes property related to a business conducted on the premises. For example, you are a cosmetic sales rep who also holds make-up parties in your home. For customer convenience, you keep an inventory of cosmetics at home. The HO policy will not cover this property.

If you are a sales person operating out of your home and have limited inventory, some companies will cover you with a Businessowners policy (BOP). A BOP provides broad coverages for buildings, personal property, loss of business income and extra expense incurred to remain in business (after a fire or other covered cause of loss), premises liability and medical payments. If you have more than $1,000 of goods off premises in transit, you will need to add additional coverage. Goods stored at other locations must be added to the policy.

If you cannot qualify for a BOP and a home business endorsement or separate policy fails to meet your need, your agent will probably have to build a special commercial package policy to handle your business. Commercial lines agents have both the expertise to design the appropriate coverage and access to the markets that offer policies for your sales business.

See Part 2 of this article.


COPYRIGHT: Insurance Publishing Plus, Inc. 2019

All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc.

 

Home Businesses (Offices) – Part 2

In part one of this article, we discussed what coverage issues must be considered when running a sales office out of a home. Besides the protection previously mentioned, you will need workers compensation coverage for any employees, even part timers, and, if you deliver anything or if your vehicle is larger than a car, van or small pickup, you may need commercial automobile insurance. Another reason for buying a commercial auto policy is if any auto is corporately owned.

Professional Offices

Regarding doctors, attorneys, architects or similar occupations, whether your home office is your only office or simply a satellite office, you will need to work with an insurance agent who is familiar with the coverages that are appropriate for professionals.

BOPs are suitable for most professional offices and can cover buildings, personal property, loss of business income, extra expenses incurred to operate the business (after a fire or other covered cause of loss), premises liability and medical payments.

Consult with your agent or your professional association(s) for professional liability and errors and omissions coverage.


COPYRIGHT: Insurance Publishing Plus, Inc. 2019

All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc.

 

Home Businesses (Landlords)

A variety of businesses are routinely operated in homes. This article discusses aspects of particular operations. Refer to Home Businesses - Basics for background information on coverage as well as our other articles discussing different in-home businesses.

Landlord

The homeowners policy is designed to cover landlord-occupied residential buildings, landlord-owned personal property, and loss of rents (after a fire or other covered cause of loss), premises liability and medical payments. Note that the maximum occupancy that may be covered under a HO policy is a four-family dwelling. A dwelling policy may be used for 1-4 family structures that are not also occupied by the landlord.

For landlords with residential property containing from five to sixty units, a Businessowners policy (BOP) is usually appropriate. It insures buildings, landlord personal property, loss of rents (after a fire or other covered cause of loss), premises liability and medical payments.

Most Bed and Breakfasts do not qualify for coverage either in the homeowners or dwelling insurance program. Bed and Breakfasts will require a combination of tenants coverage for the resident owner/manager, and a BOP to cover buildings, landlord owned personal property in boarders' rooms, loss of business income (rents and fees) and the extra expense to operate (after a fire or other covered cause of loss), premises liability and medical payments.

For landlords who have office or retail tenants, the BOP provides broad coverages for buildings, landlord personal property, loss of rents (after a fire or other covered cause of loss), premises liability and medical payments.

Workers compensation is necessary for any employee. Talk with your agent. Most states require workers compensation for resident managers even if you provide only free lodging as payment. Make sure you have certificates of insurance for any subcontractors (painters, plumbers etc.) you hire to do work for you. If the subcontractor has no insurance, you may be responsible for the subcontractor's work-related injuries.


COPYRIGHT: Insurance Publishing Plus, Inc. 2019

All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc.

 

Home Businesses (Daycare/Schools)

A variety of businesses are routinely operated in homes. This article discusses aspects of particular operations. Refer to Home Businesses - Basics for background information on coverage as well as our other articles discussing different in-home businesses.

Daycare or In-Home Schools

Coverage for abuse or sexual assault for small schools is often difficult to obtain at a reasonable price. Limited corporal punishment coverage for teachers who are employed by a school system may be available from your homeowners carrier. If you are an independent tutor or run your own school, most homeowners policies cannot be modified to include corporal punishment. Abuse and corporal punishment may be available through the association(s) that specializes in your type of school.

While the company that writes your HO policy may be willing to add an endorsement to cover piano lessons, most will not want to cover a three-to-five child daycare operation. Liability coverage may be purchased separately. Coverage for property and liability can be provided through a Businessowners policy, but none of these forms includes professional liability or abuse or corporal punishment.

Specialty schools, such as ballet, sports, personal training, animal training, or horseback riding will require specialty coverage. Again, your trade organization, or independent agent can often find you coverage at a reasonable price.

Workers compensation is essential for any person you employ.

Driving students in private vehicles or bus-like vehicles poses special problems. You must hold a Commercial Driver's license if you haul more than 16 people including the driver. Your school is probably too small to qualify for standard business auto insurance. If standard coverage is unavailable, many states have assigned risk pools and other mechanisms to provide you coverage-sometimes at reasonable prices. A good independent agent will understand these markets.

Your state will also have laws regulating the transportation of students and these laws may require a special license when transporting fewer than 16 people. Subcontracting the driving does not lessen your responsibility for a whole raft of laws from vehicle accidents, workers compensation, ADA, and whether the driver has met the new substance abuse requirements.


COPYRIGHT: Insurance Publishing Plus, Inc. 2019

All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc.

 

Home Businesses (Retail)

A variety of businesses are routinely operated in homes. This article discusses aspects of particular operations. Refer to Home Businesses - Basics for background information on coverage as well as our other articles discussing different in-home businesses.

Retail - Persons with in-home retail operations must look beyond a HO policy for coverage.

The Businessowners policy (BOP) provides broad coverages for buildings, personal property, loss of business income and extra expenses incurred to remain in business (after a fire or other covered cause of loss), premises liability and medical payments. If you have more than $1,000 of goods in transit, you will need to add additional coverage. Goods stored at other locations must be added to the policy, normally as an additional location.

You will need workers compensation coverage for any employee - even part timers. You may need commercial automobile insurance if you deliver anything or if your vehicle is larger than a car, van or small pickup or if the vehicle is owned by a corporation.

Note: some insurance companies can offer amendments to your homeowners policy that can cover certain, in-home businesses.


COPYRIGHT: Insurance Publishing Plus, Inc. 2019

All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc.

 

Home Businesses (Wholesale)

A variety of businesses are routinely operated in homes. This article discusses aspects of particular operations. Refer to Home Businesses - Basics for background information on coverage as well as our other articles discussing different in-home businesses.

Wholesale - As a wholesaler, here are some coverage options for your consideration:

Businessowners Policy - If you are a manufacturer's representative with limited inventory, some insurance companies will cover your business with a BOP. A BOP provides broad coverage for buildings, personal property, loss of business income, extra expense incurred to remain in business (after a fire or other covered cause of loss), premises liability and medical payments.

If you have more than $1,000 of goods off-premises in transit, you will need to add additional coverage. Coverage for goods stored at other locations must be added to the policy.

Commercial Package Policy - If you cannot qualify for a BOP, your agent will probably have to build a special commercial package policy to meet your needs. You will need a competent commercial lines agent to help you. Commercial lines agents have both the expertise to design the appropriate coverage and the markets for your wholesale business.

Workers Compensation - You will need workers compensation coverage for any employee - even part timers.

Commercial Auto Policy - You may need commercial automobile insurance if you deliver anything or if your vehicle is larger than a car, van or small pickup, or if the vehicle is owned by a corporation.


COPYRIGHT: Insurance Publishing Plus, Inc. 2019

All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc.

 

Home Businesses (Service)

A variety of businesses are routinely operated within residences. This article discusses aspects of particular operations. Refer to Home Businesses - Basics for background information on coverage as well as our other articles discussing different in-home businesses.

Service

The following are the most commonly insured service classes of business by a Businessowners policy (BOP). A BOP provides broad coverages for buildings, personal property, loss of business income and extra expense incurred to remain in business (after a fire or other covered cause of loss), premises liability and medical payments. If you have more than $1,000 of goods off premises in transit, you should add additional coverage. Goods stored at other locations must be added to the policy.

The following are the most commonly insured service classes of business by a BOP. If your service business is not on this list, it probably will need to be insured by the individually designed commercial package policy or similar specialty policy.

  • Appliance and Accessories - installation, servicing or repair - Commercial or Household
  • Bakeries (with baking on premises)
  • Barber Shops and Beauty Parlors and Hair Styling Salons
  • Dental Laboratories
  • Engraving
  • Funeral Homes or Chapels
  • Laundries and Dry Cleaning or Dyeing Receiving Stations
  • Lithographing
  • Mailing or Addressing Companies
  • Photocopy Services
  • Photo-engraving
  • Photographers
  • Printing
  • Shoe Repair Shops
  • Tailoring or Dressmaking Establishments-Custom
  • Taxidermists
  • Television or Radio Receiving Set Installation or Repair
  • Watch, Clock and Jewelry Repair

If you cannot qualify for a BOP, your agent will probably have to build a special commercial package policy to meet your needs. Seek out a competent commercial lines agent to help you. Commercial lines agents have both the expertise to design the appropriate coverage and the markets for your service business.

You will need workers compensation coverage for any employee- even part timers.

Commercial automobile insurance should be pursued if you deliver anything or if your vehicle is larger than a car, van or small pickup or if the vehicle is owned by a corporation.


COPYRIGHT: Insurance Publishing Plus, Inc. 2019

All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc.

 

Home Businesses (Manufacturing/Contracting)

A variety of businesses are routinely operated in homes. This article discusses aspects of particular operations. Refer to Home Businesses - Basics for background information on coverage as well as our other articles discussing different in-home businesses.

Manufacturing

Manufacturing businesses cannot normally be insured by a Businessowners policy (BOP).

Find an agent and company that specialize in the kind of product you manufacture. Look for a company that will write your size business. Make sure you consider the impact of products liability claims, coverage for your products while they are in transit or at other processors, and products belonging to others that you are working on, whether at your business or at their location.

You will need workers compensation coverage for any employee - even part timers.

You may need commercial automobile insurance if you deliver anything or if your vehicle is larger than a car, van or small pickup or if the vehicle is owned by a corporation.

Contracting

Many companies have excellent "artisan" insurance packages for the small to medium subcontractor. Ask your agent to show you different artisan packages so that you can choose a program that fits your needs. Coverages may be similar among artisan packages, but rating plans vary. Some companies charge rates based upon payroll, sales or number of employees. As your business grows, you will want to ask your agent to shop your coverage to see whether it is to your advantage to change from one rating formula to another.

If you are a general contractor, you will need to work with an agent who specializes in general contractors. Contact your local builders association. Many builders associations will sponsor programs or know of agents who specialize in general contractors.

You will need workers compensation coverage for any employee - even part timers. If you hire any subcontractors, understand that you may be responsible for any injuries to subcontractors or their employees while they work for you. Make sure that you have certificates of insurance from each of your subcontractors for workers compensation, general liability and automobile insurance. It is to your advantage if your subcontractors have liability limits of insurance at least equal to your own.

You may need commercial automobile insurance if you deliver anything or if your vehicle is larger than a car, van or small pickup or if the vehicle is owned by a corporation.


COPYRIGHT: Insurance Publishing Plus, Inc. 2019

All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc.

 

Home Businesses (Farm/Ranch)

A variety of businesses are routinely operated in homes. This article discusses aspects of particular operations. Refer to Home Businesses - Basics for background information on coverage as well as our other articles discussing different in-home businesses.

Farms and Ranches

The homeowners program can be endorsed to cover some aspects of hobby or "gentlemen" farms, including farm liability and livestock collision.

Farming for profit will require a Farm or Ranchowners policy. Farm and Ranchowners forms can cover your dwelling, barns, sheds, silos, cribs and other buildings, machinery and equipment, supplies, liability coverage, additional living expenses after a fire or other covered cause of loss; some policies can be endorsed for livestock mortality. Crop insurance is a federal program, but local farm insurance specialists can provide crop hail and crop damage coverage. Your agent should help you design an insurance program that meets your specific needs.

You may own property that previously was used as a farm. Farm insurers understand rural homesteads. You may find better protection from an agent and company who specialize in rural and farm property. If you have large barns or other outbuildings, you may need to increase other structures coverage under your homeowners insurance or convert coverage to a Farm or Ranchowners policy. If you lease land to others for grazing or crops or hunting, you will need to add separate liability coverage to your Home or Farmowners policy.

Workers compensation laws for agricultural employees vary in each state. Each state has special rules for hired hands and migrant workers. Even if you are not required to carry workers compensation coverage for a specific employee, you may still be responsible for any-work related injury to that employee.

Farm vehicles normally can be covered through a personal automobile policy. Incorporated farms may require a commercial automobile policy.


COPYRIGHT: Insurance Publishing Plus, Inc. 2019

All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc.

 

 

Home Businesses (Repairs)

A variety of businesses are routinely operated in homes. This article discusses aspects of particular operations. Refer to Home Businesses - Basics for background information on coverage as well as our other articles discussing different in-home businesses.

Repair: Auto, Bicycle, Boat, Tractors, Furniture, etc.

Don't expect your homeowners policy to give you coverage. Repair businesses work on personal property belonging to others. Your business probably will need to be insured by the individually designed commercial package policy or similar specialty form. Coverage for inventory, repair machinery, property of others, business income coverage after a fire or other covered cause of loss, and premises and products liability coverage can be built into your policy.

Look for a company that will write your size business. Make sure you consider the impact of products liability claims, coverage for goods that you are working on that belong to others whether at your business, in transit, at another processor or at your customer's location.

You will need workers compensation coverage for any employee - even part timers. You may need commercial automobile insurance if you deliver anything or if your vehicle is larger than a car, van or small pickup, or if the vehicle is owned by a corporation.

Work on autos will require an Auto Garage liability policy for the on-premises bodily injury, and auto dealers liability coverage to protect you against claims for damage to customer vehicles.

Racing: Car, Boat, Motorcycle, RV, Truck, etc.

If you are involved in racing vehicles or craft and, especially if you operate a business in building, servicing or repairing vehicles or craft from your home, you can’t rely on your homeowners policy for either liability or property coverage.

Coverage for damage to actual equipment that is raced is seldom covered. You will want to check with your agent or your racing association for coverage for shop equipment, portable tools, travel trailers and other equipment related to your racing hobby or business. You will also need liability coverage or, at a minimum, be sure that the racetrack has spectator liability coverage that applies to your race participation, including practices.

Racing Repair Business - Your business may need to be insured by a custom designed commercial package policy that may need to include coverage for inventory, repair machinery, property of others, business interruption, workers compensation (even for part-time employees) and premises and products liability

It's critical to identify if you need coverage against products liability claims that can arise from customer property you have worked on at your business, which may be transit, located at another processor or at your customer's location. An Auto Garage liability policy may be necessary to handle any on-premises bodily injuries and an auto dealers liability form can protect you against claims for damage to customer vehicles.

You may need commercial automobile insurance if you make deliveries, have a commercial-size vehicle, or if the vehicle is owned by a corporation.


COPYRIGHT: Insurance Publishing Plus, Inc. 2019

All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc.

 

Which Homeowners Policy Is Right for Me?


If you own a home; you’ll want to think about the best way to insure it. One goal is to match your needs to the right company. Some companies like new, high-valued homes while some companies do well with older or historic preservation homes. Others are comfortable with country homes or old farm homes. It pays to shop around, both for the best coverage and for a company that likes your type of home.

There are two common levels of coverage that you may consider:

Named causes of loss coverage–The policy only covers certain causes of loss to your property. You must prove to the company that one of the covered causes damaged your property.

Risks of physical loss–This covers all causes of loss except those that are excluded. The company must prove that one of the excluded causes of loss damaged your building.

You may want to discuss other types of homeowners coverage if you own a different type of residence such as a modular home, mobile home, apartment, town home, condominium or you have personal living space in a commercial building.

A Basic Homeowners policy usually provides the following:

  • Coverage for your building (ask about coinsurance and replacement cost issues).
  • Coverage for your outbuildings–garages, sheds, barns, cabanas
  • Coverage for personal property is usually 50-75% of your building limit
  • Limitations–many policies have special limits on certain types of property, such as theft loss to Jewelry and gems ($1,000), Furs ($1,000), Gold, silverware, pewter ware ($2,500), Guns ($2,000), Building supplies–no coverage for theft. Further, very little coverage may be available of other types of property, regardless of the cause of loss, such as, money, stamps, fine arts, antiques, electronics, boating equipment, etc.
  • Limited coverage for personal property that is permanently kept at storage facilities.
  • Additional living expense–pays the extra cost of temporary housing, food and other increased costs of living when you are forced from your home by a covered cause of loss.
  • Liability coverages–should you accidentally injure other people or damage their property
  • Defense costs - includes hiring and paying for a lawyer (if necessary) and paying most court costs.
  • Medical payments coverage is for minor injuries to people other than residents of the household. You don't have to be sued or be negligent.

If this short article has raised more questions about your coverage…good! Find an insurance professional to get the answers (and the protection) you need.


COPYRIGHT: Insurance Publishing Plus, Inc. 2019

All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc.

 

Fire Pit Safety


Many homeowners love the simplicity and effectiveness of using fire pits to enhance the looks and the usefulness of their homes’ outdoor space. Fire pits are great for entertaining during cooler spring and autumn days and nights and have grown increasingly popular. They may be portable units, simple dirt areas, encircled with rocks, or complex and expensive custom-built structures.

Their usefulness and ability to enhance outside livability comes with a danger. Fires are lit in these portable or permanent areas. When fire loses containment, serious injuries and damage can result. So, considering the danger to persons and property, what measures can fire pit owners take to minimize losses?

  • If you use a portable fire pit, it must be placed on a level, non-flammable (concrete, brick, gravel, etc.) surface
  • If you install a permanent fire pit, its location must meet local ordinances regarding its placement, including the need of a site inspection
  • Any fire pit should be at least ten feet aware from structures, flammable property and overhanging branches
  • Take consideration of weather conditions such as drought and wind before lighting fires
  • Do not use accelerants (gas, kerosene, lighter fluid) to start fires.
  • Only seasoned hardwoods with the proper size (logs in proportion to pit size) should be used
  • Never use fire pits to burn cardboard, paper, plywood or trash
  • Fire extinguishing equipment or materials should be kept nearby
  • Carefully supervise children when using a fire pit

COPYRIGHT: Insurance Publishing Plus, Inc. 2019

All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc.

 

Chimney Safety


Chimneys often enhance a home’s roofline as well as add a decorative interior feature (fireplace) to a home’s interior. However, it is the chimney’s function that deserves the most attention. They are intended to safely disperse the heat and smoke that result from use of a fireplace. Fireplace fires reach very high temperatures that take their toll on chimneys. It is risky to regularly use fireplaces without making sure that the chimney is in safe condition.

An April 2015 report from the U.S. Consumer Product Safety Commission reveals that, on average, more than 20,000 fires occur annually across the U.S. that are directly related to chimneys and chimney connections (found with wood-burning stoves and fireplace inserts).

One particular danger when buying an existing home that has a fireplace is that the chimney may have experienced a previous fire. There are certain signs to look for that are red flags, such as the following:

  • Chimney flue tiles are missing or damaged
  • Creosote (tar colored) flakes appear on roof or ground adjacent to chimney
  • Creosote that looks puffed or bubbled
  • Chimney damper appears warped
  • Exterior masonry has smoke-darkened cracks
  • Rain cap appears darkened from smoke and/or has a distorted shape
  • Roofing near chimney appears heat or smoke damaged

Chimney fires can be hidden, intense and even explosive, typically causing very serious levels of damage, often life-threatening. If you make use of a fireplace, wood-burning stove or an insert, it is very important to get them regularly and professionally inspected.


COPYRIGHT: Insurance Publishing Plus, Inc. 2019

All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc.

Renting Pools or Tools – Part 1 


The Internet of Things is relentless in the ways that are found to maximize the sharing of resources including creating online/mobile platforms that match buyers with sellers. The success or at least rising presence of companies such as AirBnB, Uber, Lyft and similar companies are spurring increased opportunities for property or asset owners to raise income by making underused property or services available to others on a fee-basis. AirBnB is particularly attractive as the growing trend is to arrange for products and services among individuals, such as dog care, borrowing cars, tools, arranging for various services such as housecleaning, renting bikes, performing deliveries and more as different ideas arise. Two, newer ideas have been receiving more traction: services allowing the rental of pools and others that facilitate power tool rentals.

Pools 

One popular idea is very similar to AirBnB. Platforms exist which allow you to rent outdoor or indoor pools by the hour or by the day. Potential users can use a web or mobile portal to view available facilities that are in the area. Rates are based upon factors such as the pool size, access to adjacent facilities, use of related property (such as pool tools, waterslides), purpose of rental, size of party requesting the rental, etc. 

It’s an interesting idea and certainly provides significant benefits. Persons who don’t have access to pools can find access to facilities they can afford and rent them for flexible periods and for a variety of reasons, such as an hour to relax at a pool by oneself, swimming laps, a poolside dinner party, or to rent for a longer period for large parties and special events. Use of residences may be significantly more affordable and convenient than commercially available facilities. They may also be more attractive since they can be used exclusively unlike public or commercial facilities. 

Tools 

Another popular sharing service involves the ability to rent power tools from individuals. Again, the idea is platform-based. The service allows persons who don’t own expensive tools to rent from those who own various expensive, underused property. It takes advantage of the fact that, when you aren’t not involved in occupations or hobbies that require special tools, such tools often gather dust. It rarely makes sense to own the property when the need for them is sporadic. 

So, when a person has a special project come up, or maintenance or repair need, a new alternative is to turn to neighbors and temporarily acquire the tool or equipment, use it and return it with payment. It’s a cheaper alternative to buying a rug-cleaner that’s just used a couple times a year or buying radial saws, nail guns, routers, power washers, paint sprayers, etc., when the need for them may only come once every few years. 

On the other hand, those who are property owners can rent out their tools, recouping some of their investment while retaining the property for future, infrequent use. 

However, there is a downside that sharing economy participants should know about.

 

Please see part two of this article. 


COPYRIGHT: Insurance Publishing Plus, Inc. 2019 

All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc. 

Renting Pools or Tools – Part 2


Part one discussed a couple of activities arising from the world of the sharing economy. The property owners who supply the pool facilities and the tools may enjoy additional income for their effort, but they also create new risks. 

Residential property insurance policies for homes, condos, apartments, and so on provide valuable protection. This protection is put at risk when making property available to others. Renting out residential property, parts of residential property (such as pool areas) and/or personal property (equipment or tools) may mean losing protection. 

Insurance policies commonly exclude situations that involve chances of loss that fall beyond what they charge in premiums. One area that endangers protection is business activity which is, loosely, defined as endeavors pursued for income or equivalent benefits. Renting out swimming pools and adjacent areas or tools could result in losing protection for lost or damaged property or for protection when others are harmed by your actions. The types of losses can be identical but coverage may hinge on whether the situation involved is considered a business activity. Some policies may vary in defining such activities, such as how often an activity is performed or how much income or equivalent value is acquired. However, enrolling in platforms that facilitate rentals may be enough for an insurer to ignore other considerations and treat any loss from certain circumstances as business activities, thus denying coverage. 

Here are some simple things to consider:

 

Situation 

Non-business 

Business 

During a pool party, an attendee slips while running alongside the pool, fracturing his knees. 

The attendee was there for a neighborhood pool and grill party. The injury-related expenses are covered. 

The attendee was the guest of a person who rented the pool area for an afternoon. The injury expenses are not covered. 

An adult who is lounging next to the pool is attacked and injured by the homeowner’s dog. 

The adult was a visiting friend; the situation is covered. 

The adult had rented the pool for two hours of sunbathing. The situation is likely not covered. 

A woman is using a floor sander when its motor overheats and the casing bursts, burning and lacerating her and she sues the sander’s owner. 

The sander’s owner had let his friend borrow that sander. He is defended against the suit. 

The sander’s owner had collected money for renting the sander to the user for two weeks. He may not be covered. 

 

Another negative is that the platforms that facilitate such rentals may, as part of their agreement, require participants to waive any right to sue or to hold it harmless for any losses that arise from the platform’s use. 
 
It is important when considering joining the sharing economy that you make sure that you don’t open yourself up to uncovered and potentially serious losses. 

 

Please See Part One of this article


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A Construction Coverage Gap 


The world of contractors and construction is filled with rules meant to establish standards for building materials, site preparation, construction methods, etc. Most such rules are created on the level of local government and are typically called ordinances. Each area’s ordinances reflect specific concerns, particularly natural hazards that regularly endanger property such as windstorms, earthquakes, floods and.....fire. 

Wildfires are a large problem in California. Annually that state’s wildfire season damages or destroys many homes built near forested areas that are in the midst of droughts. The likelihood of fires is high and, being in remote areas, convenient fire protection is non-existent. In order to compensate for this extreme exposure to loss, local laws often require special construction features such as on-site water supply, pumping equipment, fire-retardant roofing, and fire-resistive construction materials. 

Many homeowners enjoy the benefit of "grand fathering." That refers to any exemption from having to comply with a new law. However, such exemptions disappear under certain circumstances such as significant remodeling or when a certain percentage of a building is damaged. Therefore, property owners who face the prospect of re-building their homes also face full compliance with current building laws. Without special endorsements, it’s unlikely that their insurance policies will provide significant Ordinance or Law Coverage. These property owners could be responsible for thousands, perhaps even tens of thousands in uncovered costs. 

If you have an older home or live in an area that has special laws for rebuilding, it would be worth your time to consider adding protection against any extra costs caused by local ordinances. Your insurance professional is the person to know.


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All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc. 

Homeowners Hurricane Tips 


Homeowners that live near coastlines face possibly loss by hurricane. Hopefully, any affected person will own a homeowner insurance policy to help deal with the crisis. However, they must be aware of their responsibilities under the insurance policy in order to take full advantage of any available coverage. 

The main priority for a homeowner is to be sure that the amount of coverage is adequate in the event that the home has to be totally replaced. Also, the homeowner should keep their deductible in mind, seeking options to make sure that it is affordable. Insurers who operate in areas that experience hurricanes typically require deductibles at a high, flat amount (such as $2,000) or at a percentage of the policy's insurance limit (anywhere from 2% to 5%). 

Naturally, a homeowner should consider ways to minimize their possible loss and maximize their personal safety by: 

·         Making advance evacuation plans (including determining evacuation route, fueling car, preparing supplies, etc.) 

·         Being aware of the nearest, safe shelter 

·         Bring outdoor property inside the home (lawn equipment, toys, tools, etc.) 

·         Installing or building a proper "safe room" 

·         Cover/Secure all windows and doors 

·         Have a portable radio and stay turned to accurate source of weather broadcasts 

·         Turn off (unplug) small appliances and turn refrigerators/freezers to their highest settings 

·         If applicable, turn off fuel/oil tanks 

·         Fill sinks and bathtubs with water 

Returning to a damaged/destroyed site is not when a hurricane victim will be at his or her best, but that is the time that certain obligations have to be met in order to make the most out of any insurance recovery. It is important to do the following: 

·         At the earliest possible chance, contact your insurer with details about your loss 

·         If possible, be sure you have a way to visually record the loss details (camera, digital camera, even a smart phone camera) 

·         Take reasonable action to keep intact property protected from additional damage or loss 

·         Keep an accurate record of all expenses that are related to protecting your property as well as items related to temporary housing and meals 

Though post-catastrophe times are chaotic and spirit-sapping, it is important to keep in contact with your agent and/or insurer. Take the time to be meticulous about filling out reports, documenting the value of your loss and cooperating with claims personnel. 


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All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc. 

The Power of Nonpowder Guns 


Annually in the U.S., several million air rifles and guns that shoot ball bearings (BBs), paintballs and pellets are sold. Their projectiles are released by using compressed air instead of gun powder, so they are, collectively, classified as nonpowder guns. These weapons are accompanied by a popular belief that they are not dangerous. That belief is mistaken. Although they do not fire bullets, many persons, particularly children, are seriously injured by these weapons and even fatalities are associated with these "toys." 

If your household includes such property, it's extremely important that their use and storage be carefully supervised. The use of compressed air results in guns with enough fire power to launch projectiles that can penetrate a person's skin. Naturally, eyes are even more vulnerable to injury. Nationwide statistics show that more than 20,000 emergency room visits are directly related to injuries from nonpowder guns. Routinely, lawsuits are filed seeking reimbursement for treatment expenses and compensatory damages. 

It’s usually children using nonpowder guns and, typically, they are injuring other children. Parents are being sued more frequently and their insurance companies must step in. It is very expense to provide a legal defense against such claims and then to handle any settlements. 

Homeowners must have a realistic attitude toward nonpowder guns. Specifically, homeowners should: 

·         carefully consider whether a powerful nonpowder gun should be in the household 

·         (if applicable) determine if their children are mature enough to have one 

·         be sure to provide meaningful supervision when such guns are being used 

·         consider how and where such guns are stored when not used 

·         make sure that any required safety gear be used when handling such guns 

·         put together and follow a set of rules about how nonpowder guns are to be handled 

·         (if applicable) seek immediate, competent medical attention to properly treat nonpowder gun injuries 

Nonpowder guns are not toys. Homeowners should take steps to make sure their ownership and use are taken seriously. 


COPYRIGHT: Insurance Publishing Plus, Inc. 2019 

All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc.

Golf Carts: Cute, Handy….Dangerous 


At one time golf carts were seen exclusively on golf courses. Then, since golfing is part of the sports world, other sports saw their usefulness, so carts popped up along the sidelines of football fields and near baseball dugouts, shuttling players about. Today, many more people are aware of the non-sports usefulness of golf carts and that is becoming a problem. 

Increasingly, more exceptions are being made regarding golf cart use. At first, they could be used on areas close to golf courses, then retirement communities made exceptions, then gated and other, larger property-owner communities allowed their use. Now, exceptions are being made for their limited, public street use in small towns, college communities and in other situations. 

The increased use of golf carts means the increased number of golf cart accidents. Such incidents are a particular concern since they may involve elderly drivers who may have impairments or slower reaction times. Further, golf carts are popular with very young, frequently unlicensed drivers who may lack care and experience in operating golf carts safely. 

Pairing up golf carts with higher risk operators creates a high-risk situation. Consider several features of golf carts: 

·         Lightweight 

·         Open vehicles without roll bars 

·         Low clearance 

·         Rigid frame construction 

·         Capable of deceptive speed (some models can reach 25 mph) 

·         Do not include seat belts 

While carts are ideal for traveling along fairly level, soft-surface areas; their features and design make them quite hazardous on other surfaces. Some golf carts can move at higher speeds, but their low clearance and rigid structure make them prone to rollovers. While carts are relatively light, they still are easily heavy enough to cause serious, even fatal injury to persons trapped beneath them. It also makes a tremendous difference being in an accident on a grass surface as opposed to an asphalt, gravel, packed-dirt or cement road. Some accident statistics reveal that golf cart accidents often involve children who are hurt when flung from carts during turns. 

Another issue with golf carts is that there is no consistent regulation regarding their use and safe operation. The real issue is awareness! Persons who own and use golf carts away from courses should be careful about how they operate such vehicles, who are allowed to drive and ride in them and what safety procedures must be used to minimize accidents. No matter how cute, easy-to-operate and economical they are, golf carts are motorized vehicles that can cause serious loss and injury. Use them with care! 


COPYRIGHT: Insurance Publishing Plus, Inc. 2019 

All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc.