A New Jersey Appellate Court’s recent decision serves as a reminder for home based business operators to review your insurance coverage.   

Bay State Insurance Co. v. Jennings involves the question whether a home based occasional day care provider is operating a “business”.  The home owner received small compensation and took care of a few children over a number of years.  If the homeowner is found to be operating a business, she may not have insurance coverage under her homeowner’s insurance policy. While the trial court initially found in favor of the homeowner, the appellate court remanded the case to the trial court to hold a hearing in order to determine whether the homeowner was operating a for-profit business when a small child that she was watching was injured.  

While this case has not been fully resolved, anyone operating a home based business should read their insurance policies and make sure that you have coverage for your business related activities. This is especially true if you do not have a separate business insurance liability policy and are relying on your homeowners insurance to cover you if someone is injured at your house during a business related activity. If there’s any doubt, contact your insurance agent or company and make sure that you’re protected.