Glossary

Business pursuits exclusion

A liability exclusion for injury or damage arising from your trade, profession or other paid activity, with narrow exceptions for small or volunteer work.

Also called: business exclusion, business activities exclusion

The business pursuits exclusion removes personal liability coverage for bodily injury and property damage that arises out of a business of an insured. In the standard ISO form (HO 00 03), "business" means a trade, profession or occupation, whether full-time, part-time or occasional, and any other activity engaged in for money or other compensation. Exceptions include volunteer work, unpaid or swap-style home day care, day care for a relative, and activities for which no insured received more than $2,000 in total compensation in the 12 months before the policy period began.

The policy covers a friend's slip on your steps, but may not cover a paying client's slip when she visits your home studio. Say you tutor students at your kitchen table and earn $6,000 a year (hypothetical): that is over the $2,000 threshold, so a student's injury could go uncovered. Business property is also sharply limited under Section I.

Many homeowners assume a side income is covered because it happens at home. Check your policy, then consider an endorsement such as ISO's HO 04 42 for small office, studio or school operations (see home business endorsement), or a separate business policy. The home business gaps guide explains the options, and the liability exclusions guide lists the others.

Last reviewed October 10, 2026

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Related terms

Home business endorsement An add-on that gives a small office, studio, school or similar operation run from the house liability and business property coverage the base policy lacks. Personal liability (Coverage E) Coverage that defends you and pays damages if you are legally responsible for injuring someone or damaging their property, at home or away from it. Exclusion A policy provision that removes coverage for a stated cause, type of loss, property or circumstance that the coverage would otherwise reach. Bodily injury Physical harm to a person, including sickness, disease and resulting death, that triggers liability and medical payments coverage under a homeowners policy. Home-sharing endorsement An add-on that extends a homeowners policy to cover renting all or part of the home to short-stay guests through platforms such as Airbnb or Vrbo. Endorsement A written change attached to a policy that adds, removes or alters coverage, limits or conditions, and controls over the base form wherever the two conflict.

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