Home businesses are commonplace. These operations may be as simple as the employee who brings work home at night, to part-time "extra-income" ventures, to full-time occupations. Included are operations such as baby-sitting or daycare, craft or hobby risks, small catering or food processing, dressmaking, tailoring, or clothing design, photography, stenography, or data processing and so on. The list of the many types of home businesses is limited only by personal insureds' time, resources and entrepreneurial imagination.

An eligible business must be owned by one of the named insureds listed on the homeowners policy or by a partnership, joint venture, or other organization to which the named insured belongs.

Important: The partnership, joint venture or organization can only be comprised of the named insured and that named insured's resident relatives. Corporations are not specifically addressed in the ISO eligibility. Since corporations are a type of "organization," it would appear that corporations are eligible. However, since all corporate officers would have to be either a named insured or his/her resident relatives, it is unlikely that many corporations would qualify for coverage. Qualifying "family" corporations would likely be modest. Finally, corporate eligibility would also be controlled by the amount of receipts, size, etc. Therefore, a qualifying corporation is unlikely to represent any greater loss exposure than non-corporate home businesses. A business may be operated (insured) under a business name other than the named insured shown in the homeowners declarations; however that name should be listed either on the endorsement's schedule or elsewhere in the policy.

LOCATION

The business generally should be operated from the "residence premises" declared in the homeowners policy and, if located on the residence, the business must be incidental to the home's primary use as a residence. The business may be operated out of another structure as long as that structure is located on the described "residence premises."

Example: Bill and Bettye Bizwell own a home that is insured under a special form policy. The policy is modified with a Home Business Endorsement. It is described as Bill & Bet's Country Collectibles. The business is operated from their home. However, their home is quite large, exceeding 4,500 square feet and 75% of the space houses their business. Bill and Bettye work for Country Collectibles full-time and they net a six-figure income each year. This operation is greater than what is intended to be covered by the Home Business Endorsement.

An eligible business may not have more than three employees. Applying this rule to corporations can be problematic. There is no guidance regarding active or inactive corporate officers, so there may be some questions when a corporation is being evaluated for coverage as an in-home business. The possibility of one or more active officers, one or more inactive officers, and one or more employees may exist. Would a business with two active officers, one inactive officer, and one employee qualify? Since the ISO eligibility is unclear on this matter, it would be up to an individual company to establish its own criteria. Of course, practically speaking, a corporation that is established to the point that it has active and inactive officers along with employees is less likely to meet other eligibility criteria, so the situation might be a rare occurrence.

RECEIPTS

Only businesses that generate $250,000 in annual receipts or less may be considered for the Home Business Insurance Coverage endorsement. A business capable of exceeding this income maximum would be smart to purchase conventional commercial coverage.

INELIGIBLE BUSINESSES

If the business operation involves any of the following, the Home Business Insurance Coverage endorsement may not be used:

• manufacture, sale, or distribution of food products
  
• manufacture of personal care products such as shampoo, hair color, soap, perfume, or other similar items that are applied to the body or that may be consumed
  
• the sale or distribution of any personal care products that are manufactured by the insured such as shampoo, hair color, soap, perfume, or other similar items that are applied to the body or that may be consumed
  
• exposures which can be covered with either the Permitted Incidental Occupancy (HO 23 41) or the Home Day Care Coverage (HO 04 97) Endorsements. Businesses that commonly qualify for these two endorsements are some day cares, offices, professional, studios, and some private schools.

The ISO eligibility does not list any other program exclusions. However, ISO does provide a structure where each insurer may develop a format for eligible and ineligible business types. Since the Home Business Insurance Coverage form provides products/completed operations protection, it should be expected that most insurers will not cover high products-hazard risks, such as machine shops, any type of metal goods manufacturing other than purely decorative, and toy or furniture manufacturing.

CLASSIFICATIONS

ISO has developed four broad classifications for use with this program. However, they have left the decisions regarding the classification, eligibility, and acceptability of specific business types within the classifications, to the individual insurers. The classifications are:

OFFICE

Professional or administrative concerns such as accounting, resume writing, telephone answering, and similar operations.

SERVICE

Businesses that provide repair or other services. Examples include repair operations like bicycle, clock, jewelry, computer, electronics, or non-repair services such as housecleaning, carpet or drapery cleaning, photographers, videographers, etc.

SALES

This category is meant for businesses that sell products (EXCEPT crafts made at the residence premises) and includes operations that sell books, magazines, costume jewelry, plants, flowers, stationery, other paper products and so forth.

CRAFTS

This category includes operations that sell crafts that are made at the residence premises such as ceramics, dolls, quilts, and clothing.

Note: Individual insurers will set their own criteria, so vast differences in categorizing businesses will exist among different carriers. What is acceptable to one insurer will be ineligible for another or two different insurers may accept a certain business, but classify it differently.

COVERAGE ANALYSIS

The Home Business Insurance Coverage endorsement provides coverage for business exposures by changing the way the homeowners policy defines "business" and "insured." The modified definitions, coupled with the addition of nearly 20 other business or commercial terms amends the homeowners policy to provide business protection. Let us look first at the two redefined terms.

"business" - refers to a trade, profession or occupation that is described in the Home Business form's Schedule. The operation must be run either at or from the "residence premises" and it must be owned by either:

• the named insured,


• a partnership, joint venture, or


• other organization.

If the business is owned by an entity that is larger than the named insured, that entity has to consist only of the named insured and relatives who are members of the named insured's household. The restriction of business owners to the named insured and resident relatives applies not only to business partners; but also to stockholders.

"insured" - is modified to refer to both the named insured and any residents of the named insured's household who are relatives, but only if they are partners, members or stockholders in the insured's business operation. However, the named insured and any resident relatives must be the business's ONLY partners, members, or stockholders. If there are any other partners, members, or stockholders, the business is not eligible for the program since it does not meet the definition of "insured."

Note: Pay particular notice to the fact that, if the described business involves an ownership interest which is neither a named insured nor a relative of the insured who lives in the insured's house, the situation does not qualify under the Home Business form's definition of "insured" nor "business." Therefore, a loss involving a business which is partially owned by someone other than an insured or his resident relative is ineligible for coverage. Obviously, this form should not be used for any home business exposure that faces the likelihood of adding a new ownership interest.

Example: Jason Argonut runs Sue-ME.com out of his home. Sue-Me is a specialized Internet search engine that helps users identify the easiest way to file a lawsuit against another person or company. Jason hires one employee and then another as his business grows. His insurance agent has kept track of his business and had Jason add the HO 05 90 Home Business Insurance Coverage endorsement to his policy. Three months into his modified homeowners policy term, Jason rewards his two, hard working employees with stock in his Sue-Me.com. A couple of months later, a client who is visiting Sue-Me for guidance on working with their search engine trips over a pile of cables and hits her head against a desk. The client slips into a coma and loses her business. The client's family uses Sue-Me.com's search engine to file an air-tight lawsuit against Sue-Me.com. When Jason requests that his insurer protect him against the claim, he's told that, because his employees have received stock, the Home Business endorsement is voided.

Employees of the described business are also insureds when acting within their job duties. However, injury by an employee:

• to the named insured or other members of the insured's household


• that is caused by providing or not providing professional health care service


• which involves paying on behalf of or sharing a loss that must be paid because of an injury to an insured or resident relative are excluded from coverage.

Further, there is no coverage for property damage to property owned or controlled by any insured or his employees.

The revised definitions are consistent with those found in the ISO version of the BOP (Businessowners Policy). The additional definitions are:

advertising injury - injury from oral or written material that slanders, libels or disparages; or violates a right of privacy; misappropriation of ad ideas or business style; infringement of copyright, title or slogan

business income - the net income (net profit or loss before income tax), plus normal continuing operating expenses including payroll

coverage territory - The U.S., its territories and possessions, Puerto Rico, Canada; international waters or airspace, as long as travel or transport is to or from a listed coverage territory; worldwide products for goods made or sold by the insured in the coverage territory and for suits brought in coverage territory. Coverage is also worldwide for the insured or other person while on the insured's business, provided that person lives in the coverage territory and is away from the coverage territory for less than one month

employee - includes a "leased worker" but not a "temporary worker"

extra expense - the necessary expense incurred during the period of restoration, as long as the expenses actually reduce the amount of loss

impaired property - refers to tangible property, excluding product or work of the insured, that has lost all or part of its usefulness because it contains a product or work of the insured that is known or thought to be defective, deficient, inadequate, or dangerous and that property can be restored by repair, replacement, adjustment or removal of the product or work of the insured. Property is also considered impaired if its usefulness has been wholly or partially destroyed by the insured's failure to fulfill the terms of a contract/agreement and the property can be restored by the fulfillment of that contract/agreement

leased worker - a person leased to the insured by agreement with a labor leasing firm to perform the duties of the insured's business, excluding "temporary workers"

loading or unloading - the handling or movement of property onto, into, while on, and until delivered-off of or from, any aircraft, watercraft, or "auto," Loading/unloading DOES NOT include property moved by mechanical devices other than a hand truck or those attached to the vehicle

operations - "your" business activities at the "residence premises"

period of restoration - begins 72 hours after direct physical loss (immediately for extra expense) and ends on the date property SHOULD be repaired with reasonable speed and same quality, or when the business is resumed at a new permanent location

personal injury - loss other than "bodily injury" from false arrest, detention, imprisonment; malicious prosecution, wrongful eviction, entry or invasion of the right of privacy of a room, dwelling or premises occupied with permission, oral or written material that slanders or disparages goods, products, or services; oral or written material that violates a right of privacy

pollutants - any solid, liquid, gaseous, thermal irritant or contaminant, smoke, vapor, soot, fumes, acids, alkalis, chemicals, and wastes-including products to be recycled, reconditioned, or reclaimed

products-completed operations hazard - "bodily injury" and "property damage" away from insured premises, caused from the product/work of the insured, except products in the insured's physical possession or work not completed/abandoned. Completed work is when all work in the contract is complete; or finished work on a site if the contract calls for work at more than one site; or work on a site has been put to its intended use by other than a contractor or subcontractor working on the same project. No transportation of property, unless loss from "loading or unloading"; or tools, uninstalled equipment, or abandoned/unused materials

suit - a civil proceeding alleging damages for injury/offenses covered by this insurance, including arbitration or other alternative dispute resolution proceedings with insurer consent

temporary worker - a person furnished to the insured to substitute for a permanent "employee" on leave, or to meet a seasonal/short-term workload condition

valuable papers and records - inscribed, printed, or written documents; manuscripts; records, abstracts, books, deeds, drawings, films, maps or mortgages. Not included: "money," "securities," converted data, programs, instructions used in data processing, nor materials the data is recorded on

your product - any goods, products (other than real property) manufactured, sold, handled, distributed, or disposed of by the insured, including containers other than vehicles, materials, parts, or equipment furnished in connection with such goods or products. Also includes warranties/representations regarding the fitness, quality, durability, performance, or use of the product; the providing of or failure to provide warnings or instructions. Not included are vending machines or other property rented to or located for the use of others but not sold

your work - work or operations performed by, or on behalf of, the insured; materials, parts or equipment furnished in connection with such; as well as, warranties or representations made with respect to the fitness, quality, durability, performance, or use of the work; the providing of, or failure to provide, warnings or instructions

Again, these definitions are consistent with those found in the ISO version of the Businessowners Policy (BOP).

SECTION 1—PROPERTY

A. OTHER STRUCTURES USED FOR BUSINESS

In the basic homeowners policy any structure, other than the dwelling itself, that is in any way, at any time, used for business purposes is not covered. The Home Business Insurance Coverage endorsement provides coverage by adding separate insurance for another structure. That structure has to be described and must specify a separate insurance limit. Once scheduled, the applicable other structure is not covered by the policy's insurance limit appearing under Coverage B.

Example: scenario one - Cloy Benspot's home is, inexplicably, insured under a Broad Form Homeowners policy with a Coverage B insurance limit of $20,000. His premises include two large, detached garages. Garage A houses the Benspot family vehicles while Garage B is used as the office/warehouse for Benspot Home Cleaning Services. Garage B is scheduled on the Home Business Insurance Coverage endorsement for $8,000. However, when Garage B is flattened during a severe windstorm, the loss to the building is estimated at $13,000. In this instance, only $8,000 is available to replace Garage B even though the policy has $20,000 under its Coverage B limit. ONLY the SCHEDULED coverage applies to another structure that has a business use. On the other hand, if Garage A was destroyed and the Coverage B limit was inadequate to replace the building, the insurance under the Home Business endorsement WOULD NOT be available for the loss.

The fact that the regular insurance provided under the basic homeowner's Coverage B and that granted under the Home Business endorsement's Coverage A are mutually exclusive generally makes sense. However, what would happen if, for some reason, the business use terminated?

Example: scenario two - Cloy Benspot's home is, inexplicably, insured under a Broad Form Homeowners policy with a Coverage B insurance limit of $20,000. His premises include two large, detached garages. Garage A houses the Benspot family vehicles while Garage B had been used as the office/warehouse for Benspot Home Cleaning Services and was scheduled on a Home Business Insurance Coverage endorsement for $8,000. Several months after scheduling the other structure, Garage B is flattened during a severe windstorm. Again the loss to the building is estimated at $13,000. When Cloy is told that, per the endorsement, only $8,000 is available to replace Garage B, Cloy gives the insurer proof that the business use of the garage ended two months before the loss. Due to this circumstance, how should coverage apply:

The way the policy and the endorsement are worded, the appropriate response should be item B. above. While the homeowners excludes coverage for items that are specifically covered, the endorsement's coverage was lost once the garage was no longer used in business. It appears appropriate that the basic policy coverage be applied and, if allowed by the insurer's rules, a partial refund should be returned on the Home Business Insurance Coverage endorsement premium.

B. COVERAGE C PERSONAL PROPERTY

Personal property used for business purposes may be covered, up to the limit selected and stated in the endorsement, while contained in the dwelling that is located on the "residence premises" insured in the homeowners policy. The option also exists to designate a specific limit for personal property coverage in other structures as long it is located at the "residence premises."

If no limit is shown for business personal property, then the $2,500 currently provided for in the homeowners policy is the maximum coverage available.

Also covered as personal property is the property of others in the insured's care, custody, and control, as well as leased personal property that the insured has a contractual responsibility to insure.

MONEY

The unendorsed homeowners policy provides a maximum of $200 for money, bank notes, bullion, gold (other than goldware), silver (other than silverware), platinum, coins, and medals. With the Home Business Insurance Coverage endorsement, the limit is increased to $1,000. This $1,000 is the maximum available for the combination of personal and business loss. For example, it does not give $200 for personal money losses and $1,000 for business money losses; it only increases the total limit provided, so the result is that the Home Business endorsement provides an additional $800 coverage for money, bank notes and similar property.

VALUABLE PAPERS AND RECORDS

No coverage is provided under the homeowners policy Coverage C for the cost to research, replace or restore business information on lost or damaged material. This exclusion applies to business information in any format whether it be paper, electronic, and so forth. However, the Home Business endorsement, under its Additional Coverage section, does add some coverage for this class of property.

For more, general, information on this topic, please refer toe PF&M Section 141.13, Valuable Papers Coverage Form.

OFF-PREMISES

The limit for business property while it is away from the residence premises is increased to $5,000 from the $250 set in the homeowners policy. This increase in off-premises protection does not apply to money and securities.

PROPERTY NOT COVERED

In addition to the types of property not covered in the underlying policy, one additional type of property is also excluded - contraband or property that is used in the course of illegal transportation or trade.

C. SECTION 1—ADDITIONAL COVERAGES

Two coverages provided in the homeowners policy as homeowners additional coverages are expanded for commercial application. They are:

1. Trees, Shrubs And Other Plants - normally, this type of property grown for commercial use is excluded, but in the Home Business endorsement it is now covered for the same insurance limits as non-commercial trees, shrubs and plants.

2. Credit Card, Fund Transfer Card, Forger and Counterfeit Money - was limited to $500 in the homeowners policy with no coverage is the loss was related to business activity. It has now been increased to $1,000, and the business use restriction has been eliminated.

Five new "business" additional coverages are added by the Home Business endorsement:

1. Accounts Receivable - The form provides up to $5,000 on premises and $2,500 away from the residence premises.

2. Valuable Papers and Records - A maximum of $2,500 is available for direct damage to such property while located on the residence premises. The coverage includes the cost of research and other expenses to recreate or restore business records. However, the coverage DOES NOT apply to:

- business samples

- property to be delivered after being sold

- property located away from the residence premises.

3. Business Income - actual loss sustained (the business income definition has been added in this endorsement). Included with Business Income is additional coverage for Extended Business Income, which provides protection for up to 30 days after the business has been restored with reasonable speed when a covered business income loss has occurred.

4. Extra Expense - actual expenses incurred (the extra expense definition has been added in this endorsement).

5. Civil Authority - covered is the actual loss sustained for business income and extra expense as a result of action by a civil authority prohibiting access to the residence premises.

EXCLUSIONS

The following additional exclusions apply:

1. Dishonesty

No coverage exists for any loss or damage from any dishonest or criminal act related to the actions of the insured. Such actions are also excluded when they involve anyone with any interest in the property; any of their partners, employees, directors, trustees, authorized representatives; or anyone at all to whom property has been entrusted for any purpose. This exclusion applies regardless whether any of the mentioned persons were acting alone, or in collusion. It also applies whether or not the actions occur during business hours or in the course of employment.

There are a couple of exceptions to this exclusion. The exclusion does not affect coverage for acts of destruction by employees. (Theft by employees is definitely excluded but acts of destruction are covered.) It also does not affect loss or damage to accounts receivable and valuable papers and records by carriers for hire.

Example: Rita Naywirth runs a modest bookstore out of her home called "Easy Readers." Rita's homeowners policy includes a Home Business endorsement that contains a description of her business. Rita still hasn't recovered from the huge argument she had a few days earlier when she fired Bernie, a very lazy employee. Her new employee, Trudy, is a pleasant surprise. However, Rita is stunned when Trudy calls her over with a discovery. A display containing scores of her store's bestsellers had all been saturated with glue—Bernie's farewell shot. This loss would be covered by the Home Business endorsement.

2. False Pretense

In cases where loss or damage has occurred because the insured, or someone the insured entrusted with property, voluntarily parted with the property through a fraudulent scheme, trick, device or false pretense, there is no coverage.

Example: It's Rita Naywirth again. She's reported the loss of a shipment of a bestseller. Last week, a person identifying herself as the president of a local school board arranged to purchase three dozen copies of a bestseller. She said she was going to share the books with the board members and other school parents for a review. Rita agreed to ship the books and the president gave her a shipping and billing address. Rita shipped the books later that day. The next week, Rita called the board's office to follow-up on the sale. She discovered that the number was valid, but the board was not at the address she was given by the "president." Further, Rita happened to have called the board's real president who said she had never heard of the person who bought the books. The address Rita shipped the books to was an abandoned storefront. Since Rita was tricked into delivering property, the loss was not covered.

3. Business Income and Extra Expense Exclusions

The Home Business Insurance Coverage form will not provide protection against any business income loss or extra expense that is related to:

• delays in rebuilding, repairing or replacing property or resumption of operations that are caused by strikers or other persons;
  
• suspension, lapse, or cancellation of a license, lease, or contract; or
  
• consequential losses.

The exclusions that apply to Accounts Receivable and Valuable Papers and Records are similar to those found in standard commercial property policies. Briefly, there is no coverage for loss to either of these property classes which:

• are due to War, Neglect, Nuclear Hazard or Intentional Loss
  
• involve erasure or distortion of business information that is caused by programming errors, faulty machine instructions or by the improper installation/maintenance of data processing equipment or parts (but there is coverage for such damage when it's caused by lightning strikes)
  
• is contraband or illegally traded or transported property

Under Accounts Receivable, there is not protection against losses:

• revealed by bookkeeping errors including erroneous billing
  
• due to altered, falsified, concealed or destroyed records, or
  
• revealed by auditing or inventory computations.

Under Valuable Papers and Records, no protection is available for losses:

• due to processing or copying errors (including omissions) or
  
• resulting from wear and tear, deterioration or latent defect.

CONDITIONS

All of the basic homeowner policy provisions apply to the Home Business Insurance Coverage endorsement; however, a number of property conditions are added or revised. The changes result in making the Home Business coverage similar to what is found in commercial property forms.

Loss Payable - obligates the carrier to include any "business" loss payable in any loss adjustment or claim settlement.

Lender's Loss Payable - similarly, a mechanism is provided to add coverage for loss payees who, through various circumstances, are loss payees. The insurable interest of such payees is commonly established by the following:

• warehouse receipts
  
• contracts for deeds
  
• bills of lading
  
• financing statements

This condition further obligates an insurer to make payments that are proportionate to each person's insurable interest in the property that suffers damages.

Contract Of Sale - likewise, coverage is available to protect the interest of the parties involved in contracts of sale on covered property

Property Of Others - the value of property of others in the insured's care, custody, or control will be determined by the amount for which the insured is liable PLUS the insured's labor, materials or service costs.

Valuable Papers And Records - for those valuable papers and records that are not replaced or restored, their value will be based upon the cost of either prepackaged software programs or the blank materials needed for reproducing the records, plus the labor to transcribe or copy such.

Accounts Receivable - when the insured is not able to accurately determine the accounts receivable that are outstanding at the time of loss, a particular valuation method is used. Under this method, the amount of recovery is, basically, the average monthly values of accounts receivable for the 12 months preceding the loss. These monthly values are adjusted for seasonal or normal fluctuations minus undamaged accounts, collectable accounts, bad debts normally uncollectible, and unearned interest and service charges.

No Benefit To Bailee - this condition found in the homeowners policy is reworded to clarify that no entity or party other than the insured who has custody of covered property will benefit from this insurance. The condition preserves the insurer's position to subrogate against a bailee for losses it pays out under the policy.

Example: Pete Klericul is a freelance restaurant critic who works from his home's office. His multitude of equipment, including a state-of the-art laptop, is insured under the Home Business Insurance Coverage endorsement. Pete stops in the Great Purchases Hotel and Consumer Warehouse to pick up his laptop. The store's PC Services Dept. had the laptop to upgrade its memory. The manager says that the previous night, someone broke into the store and Pete's laptop was among the stolen merchandise. A couple of weeks later, after paying Pete for the loss, his insurer then contacts Great Purchases to get reimbursed for the loss.

Coverage Territory - this condition states, with respect to business property, that any loss or damage that commences or begins within the coverage territory, or is otherwise in transit between points in the coverage territory, is covered.

This statement appears to be redundant considering wording found elsewhere in the endorsement.

Resumption Of Operations - in order to encourage speedy resumption of operations after a loss, if the insured can resume operations in whole or in part by using the property at the residence premises, whether damaged or not, the insured must do so, or the amount of business income or extra expense coverage will be reduced accordingly.

Limitation - Electronic Media And Records - the Home Business Insurance Coverage form will not pay for loss of business income involving electronic media and records that still exist after 60 days from the loss date or the time it takes to replace, rebuild or repair other business property that was damaged in the same loss. This limitation protects the insurer against prolonged business information recovery efforts such as situations where no backups or copies exist.

Electronic media and records are defined as:

• EDP recording or storage media including films, tapes, discs, drums, or cells; the data stored on the recording media; or the programming records used for electronic processing; or
  
• electronically controlled equipment. Programming records can include operations manuals, procedure manuals, development manuals, or printouts of actual computer code.

SECTION II - BUSINESS LIABILITY COVERAGE

Coverage E—Personal Liability is extended to cover business liability for on-premises and products-completed operations hazards as long as the occurrence takes place in the coverage territory and during the policy period. Further, the loss must result from the necessary or incidental use of the residence premises to conduct the business. Coverage is also extended to include both personal injury and advertising injury liability.

If you're used to working with CGLs, it is very important to resist the temptation of assuming that the coverage is the same. This portion of the Home Business Insurance Coverage form is not as encompassing as a CGL. This form is a narrower type of commercial liability coverage that offers: the following:

• on-premises liability at the residence premises,
  
• limited off-premises protection, and
  
• products/completed operations coverage.

Coverage F—Medical Payments to Others is similarly extended to business occurrences.

EXCLUSIONS

The Home Business Insurance Coverage adjusts the homeowner policy's liability exclusions to suit its needs by modifying the following:

The exclusion against coverage of business related losses by redefining it to make an exception for losses involving the business described in the endorsement; including the insured's work or product.

The exclusion against professional liability by including nine examples of professional services that do not qualify for coverage. Note that the examples are illustrations of what is excluded and are not intended to be merely a list of ineligible activities.

The Home Business Insurance Coverage adjusts the homeowner policy's liability exclusions to suit its needs further by adding several exclusions. The following do not qualify for coverage under the endorsement:

• specified instances of personal or advertising injury like breach of contract, other than misappropriation of advertising ideas under an implied contract; the failure of goods, products or services to perform or conform with advertised quality; wrongful description of price or goods/services; or any offenses committed by an insured while in the advertising, broadcasting, publishing or telecasting business
  
• damage to impaired property or property not physically injured
  
• damage to particular property, such as premises the insured has sold, given away, or abandoned; damage to premises at which the insured, or a contractor/subcontractor working on behalf of the insured, is performing operations; or any part of any property that has to be repaired or replaced because work done by the insured was not correctly performed
  
• damage to your product or any part of it
  
• damage to your work or any part of it (unless performed on the insured's behalf by a subcontractor)
  
• employer's liabilit—excluded is any bodily injury to an employee of the insured, or the spouse, child, parent, brother, or sister of that employee, as a consequence or result of employment or performance of duties necessary and relating to the conduct of the insured's business. It is further clarified that the exclusion applies whether the insured is liable as an employer, or in any other capacity, or whether the insured is obligated to share damages with or repay someone else, who must pay damages because of the injury, recall of products, work, or impaired property
  
• personal or advertising injury
  
• pollution
  
• recall of product, work or impaired property.

EXCLUSIONS TO MEDICAL PAYMENTS TO OTHERS

Excluded are any medical payments to others for bodily injury suffered by any insured, by a person hired to work for or on behalf of the insured or tenant of the insured, by persons involved in athletics, by injury otherwise covered by the products/completed operations hazard, or by any other injuries otherwise excluded under the Coverage E— Personal Liability exclusions.

C. SECTION II — ADDITIONAL COVERAGES

In the Personal Liability Additional Coverage 3 for Damage to Property of Others, the exclusion regarding the business of the insured is deleted. All of the exclusions in this endorsement already discussed as applicable regarding property damage apply to this additional coverage. However, the limit of liability for this coverage is increased to $2,500 per occurrence, subject to the aggregate limit shown in the schedule.

D. SECTION II - CONDITIONS

LIMITS OF LIABILITY

1. The limit for products-completed operations hazard is the same as that for the Coverage E limit shown in the declarations.

2. The limit for all other business liability is twice the sum of the Coverage E and F limits shown on the declarations.

3. The limit for Damage to Property of Others is increased to $2,500 per occurrence.

IMPORTANT: All of the limits referenced above are annual aggregates. In other words, these limits are reduced by each and every loss that qualifies for coverage and are only restored when the policy renews to a new, annual policy period. Therefore, any or all of the limits could be exhausted during a policy period.

SEVERABILITY OF INSURANCE

The coverage in this endorsement will be applied separately to each insured except for the Limits of Liability. The Annual Aggregate Limits of Liability are not increased in any way no matter how many insureds are involved.

Of course, the fact that the Home Business form's coverages apply separately and equally to any and all insureds is an extremely minor point considering that each and every loss reduces the annual aggregate limits of insurance. This condition is just another way of saying that all losses within a policy period may be racing with each other to exhaust coverage.

E. SECTIONS I AND II—CONDITIONS

POLICY PERIOD AND COVERAGE TERRITORY

The homeowners condition regarding policy period and coverage territory is replaced by wording that clarifies that losses must occur during the policy period and within the defined coverage territory to be protected by this endorsement.

EXAMINATION OF YOUR BOOKS AND RECORDS

A new final condition is added which gives to all insurers the right to examine and audit the insured's books and records as they relate to the insurance coverage provided. The insurer many examine this material at any time during the policy period, plus any time up to three years after expiration.