If you are involved in a special hobby or activity, you may depend on your homeowner (HO) insurance policy to handle a potential loss. A HO policy usually includes a definition of “business.” This term is so broad that nearly any activity can qualify as a business. In such a case, a hobbyist should contemplate on whether or not business insurance is necessary.
Let’s say you have a passion for photography and your hobby is to take pictures at weddings and other events. While you may consider this as your hobby, your insurer may define your activities as a business. If your camera equipment is stolen or damaged, there may be as little as $250 protection under your HO policy. HO coverage for business property differs depending on whether it is located at or away from your residence.
Imagine another possible situation involving your photography hobby. This time, you’re at a wedding job and have the bridal party all set-up for a perfect shot. As you are snapping away, one of your equipment pieces with hot lighting tips over, injuring two women in the bridal party. Since your hobby is considered a business, a HO policy may exclude coverage if the injured women decides to sue you.
Generally, any type of sale or service job involves some type of business property that is excluded or limited under a homeowner policy. Therefore, the legal form of the business may create a need for business insurance. If a limited liability company, corporation or partnership is formed, the related activity is a business and needs business coverage. Also, most HO policies will not provide coverage for employees or for any professional liability.
The best advice for you is to first determine if your hobby is qualified as a business. Then talk to an insurance professional to determine the proper coverage you will need.
If you have any questions about your existing policy, are inquiring information about a possible future policy or need further information, please call us at (631) 738-7300 or get a quick quote at www.vrpinsurance.com
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