The question of the month deals with an exclusion found on the standard homeowners policy pertaining to a business conducted from an insured location or engaged in by the insured. The purpose of the exclusion is to separate the normal liability risks facing a homeowner from those risks associated with running a business.

However, many homeowners do conduct business operations from their homes and accordingly, need insurance protection for the possible liability claims that may arise. Insurers do offer such coverage, usually in the form of an endorsement to the homeowners policy or as a stand-alone policy. The Insurance Services Office (ISO) has an endorsement, HO 07 01, that may be used to insure a home business. This endorsement can cause questions to arise from the insured homeowner. For example, what risks are covered by this endorsement; what risks are not covered; how much liability coverage is needed; what type of business operations are covered; are partnerships included as insureds; and can owners of the premises leased to the insured businessowner be included as insureds

under the endorsement?

For the answers to these questions and for a thorough understanding of the home-based business liability coverage, link onto the designated article in the Bulletins.

The supreme courts of New Hampshire, Alabama, South Carolina, and Kansas have rulings in the Dec Page this month. The New Hampshire court had to deal with a question as to whether the homeowner was obligated to repair or replace his dwelling before he was entitled to replacement costs from the insurer. The purpose of the appraisal clause in a homeowners policy was the issue before the Supreme Court of Alabama; this was a matter of first impression for the court. In the South Carolina case, the insurer sought a declaration that the CGL form issued to a homebuilder did not cover the claim of the homeowner for damages caused by the negligence of a subcontractor; the trial court ruled in favor of the insured and the case was appealed to the Supreme Court of South Carolina. The issue of intentional act versus intent to injure in reference to the intentional injury exclusion in insurance policies has been an issue for courts over many years. The case from the Kansas Supreme Court offers a very intense and instructive discussion of the various ways courts today view the intentional injury exclusions found in insurance policies.

Finally, the Dec Page notes the recent actions of some states pertaining to insurance coverage.

Questions and Answers

Multiple drivers each have applicable UM/UIM coverage. Whose coverage is primary? See UM/UIM and the Other Insurance Clause. Should a tenant's auto damages be covered under the apartment building owner's CGL Policy? See Tenant's Auto Damages Covered Under Apartment Building Owner's CGL Policy. Should the non-owned auto exclusion apply to the non-permissive use by the insured's fifteen year-old daughter? See Non-owned Auto Exclusion and Non-permissive Use by Family Member.

Are stored winter tires considered ″equipment″ under the PAP? See Stored Winter Tires ″Equipment″ Under PAP. A vehicle requiring diesel fuel is damaged by a fill-up with regular fuel. Is this a covered loss? See A Vehicle Requiring Diesel Fuel Damaged by Regular Fuel Fill-up.

Farm Excess Liability Policy

The newly developed ISO Farm Excess Liability Policy Form FE 00 01 10 06 is discussed. ISO developed this form in part due to customer requests for higher limits but not broader coverage. A discussion of the form is presented. The form is designed to complement the Farm Umbrella policy. See Farm Excess Liability Policy.