What it does
HO 07 01 turns a homeowners policy into a home-business package for one scheduled business. It removes the homeowners business exclusions for that business and adds Section I business property and Section II business liability coverage, subject to the endorsement's own limits and exclusions. Companion endorsements (HO 07 50 to HO 07 57) add additional insureds, loss payees, spoilage and valuable papers options, which shows the package is built like a small commercial policy.
Who needs it
Sole proprietors and family businesses run from home: office, service, crafts, and similar low-hazard operations. Typical eligibility rules require that the business be owned by the named insured (or a family organization), operated from the residence premises used principally as a residence, have no more than three employees and stay under a gross-receipts cap; food and personal-care product manufacturing are commonly ineligible.
Key provisions and limits
- The business is scheduled; other businesses of the insured stay excluded.
- The business liability portion is not a substitute for professional liability, workers compensation or commercial auto.
Quoting and selling notes
- Confirm the business description, employees and receipts against the carrier's eligibility rule; once the business outgrows it, move it to a BOP or CGL and property program.
- Pair with DL 98 03 when the client carries an ISO personal umbrella.
Editions and availability
Editions in use and where they apply: 03 22 (32 jurisdictions); 05 11 (7 jurisdictions: AL, CA, FL, GA, HI, OR, VI).
A homeowners policy is not built for commercial exposures. Workers compensation for employees, business auto, professional liability and larger product or premises exposures need commercial policies; use homeowners endorsements only for incidental activity and move growing businesses to a BOP or CGL program.
