Most homeowners insurance policies exclude coverage for liability relating to "business pursuits." Although the exact formulation varies by state, the courts generally define a "business pursuit" as a continual or recurrent activity carried out for financial gain. In most states, courts give a broad interpretation to "business pursuits," drawing in almost any activity that results in financial gain. In these states, if you devote a non-trivial amount of time to your online publishing activities and make any money from them -- for example, through advertisements or a tip jar -- then you probably are carrying on a "business pursuit," and your coverage could be lost. Conversely, if you don't make any money from your online publishing activities (or more precisely, if financial gain is not your motivation), then you probably are not engaging in a "business pursuit," and you won't lose coverage under your homeowners insurance. As Eugene Volokh notes, "if you're worried about the risk of libel lawsuits, you might want to consider staying entirely noncommercial." (emphasis in original).
In other states, the courts have interpreted "business pursuits" in a narrower fashion. There, you might be able to argue that your online publishing activities are not business pursuits so long as they are not your primary occupation or making a profit is not your primary motive. In these states, going commercial does not necessarily carry the same risk of losing coverage under your homeowners insurance.
Most homeowners policies do not have a separate provision stating what law will be used to interpret them, so courts ordinarily will apply the law of your place of residence.
Choose from the list below to view state-specific information on the "business pursuits" exclusion in the fifteen most populous U.S. states and the District of Columbia. Keep in mind that there is no case law directly addressing the definition of a "business pursuit" in the online publishing context, so there is substantial uncertainty surrounding this area of law.
Arizona law defines a "business pursuit" as follows:
To constitute a business pursuit, there must be two elements: first, continuity, and, secondly, the profit motive; as to the first, there must be a customary engagement or a stated occupation; and, as to the latter, there must be shown to be such activity as a means of livelihood, gainful employment, means of earning a living, procuring subsistence or profit, commercial transactions or engagements.
Indus. Indem. Co. v. Goettl, 138 Ariz. 315,319 (Ariz. Ct. App. 1983) (quoting Krings v. Safeco Ins. Co., 6 Kan. App.2d 391, 393 (1981)). CMLP has identified no Arizona cases interpreting this test in the context of online publishing out of the home (or elsewhere).
Arizona appellate courts have interpreted the category of business pursuits in a variety of contexts. For example, the Court of Appeals of Arizona has held that childcare services operating out of the insured’s home fell within the exclusion where the insured regularly babysat at least five children, had advertised her babysitting services in the newspaper, kept regular weekday hours, and was paid for her services. Farmers Ins. Co. v. Wiechnick, 166 Ariz. 266 (Ariz. Ct. App. 1990). In another case, the Court of Appeals of Arizona held that the activities of Humberto B. “Smokey” Santillo, Sr., selling herbs and nutritional advice, constituted a business pursuit. Fimbres v. Fireman’s Fund Ins. Co., 147 Ariz. 75 (Ariz. Ct. App. 1985). The Court noted that by selling a prescription for herbs, Smokey’s activities “originated from, grew out of, flowed from and had a connection with his regularly conducted business.” Id. at 77.
Therefore, if you live in Arizona, you may be in danger of losing coverage for your online publishing activities if you make money from your website or blog, such as through advertisements or a tip jar, unless those activities are temporary or sporadic.
Note that specific language in a policy might lead a court to a result different from the overall state trend.
California law defines a business pursuit "as a regular activity engaged in for the purpose of earning a profit." Smyth v. USAA Property and Casualty Insurance Co., 152 Cal. App. 3d 864, 869 (1984). CMLP has identified no California cases interpreting this test in the context of online publishing out of the home (or elsewhere). As a general matter, however, California cases have established that an activity need not be full-time or a primary (or even major) source of income in order to qualify as a business pursuit.
Therefore, if you live in California, you may be in danger of losing coverage for your online publishing activities if you make money from your website or blog, such as through advertisements or a tip jar, unless those activities are temporary or sporadic.
Note that specific language in a policy might lead a court to a result different from the overall state trend.
Florida law defines a business pursuit as "a continuous and comprehensive activity for financial gain." State Farm Fire & Cas. Co. v. Friend, 478 So.2d 1198, 1200 (Fla. App. 1985). CMLP has identified no Florida cases interpreting this test in the context of online publishing out of the home (or elsewhere). The Friend case (above) suggests that a short-term, part-time activity carried out for money may not be considered a business pursuit when the primary motive of the activity is not financial gain (in that case, the insured person was helping out a friend).
Therefore, if you live in Florida, you may have an argument that your online publishing activities are not a "business pursuit" if your primary motivation is not financial gain. This argument might be undercut, however, if your publishing is more than a part-time, short-term activity.
Note that specific language in a policy might lead a court to a result different from the overall state trend.
Georgia law defines a "business pursuit" as "a usual commercial or mercantile activity customarily engaged in as a means of livelihood and typically involving some independence of judgment and power of decision." Brown v. Peninsular Fire Ins. Co. 320 S.E.2d 208, 209 (Ga. App. 1984). CMLP has identified no Georgia cases interpreting this test in the context of online publishing out of the home (or elsewhere).
As a general matter, Georgia courts have excluded from the category of business pursuits activities that are not the insured's primary occupation, even if engaged in for profit. See for example Brown (above) and Southern Guaranty Insurance Co. v. Duncan, 206 S.E.2d 672 (Ga. App. 1974). Other courts have indicated that an activity will not be considered a business pursuit if the primary motivation is not financial gain. See for example Nationwide Mutual Fire Insurance Co. v. Collins, 222 S.E.2d 828 (Ga. App. 1975).
Therefore, if you live in Georgia, you have a good argument that your online publishing activities are not a business pursuit if you carry them out in your spare time or your primary motivation is not financial gain, even if you make money from those activities.
Note that specific language in a policy might lead a court to a result different from the overall state trend.
Illinois law defines a "business pursuit" as a "continuous or regular activity, done for the purpose of earning a profit." State Farm Fire & Casualty Company v. Moore, 430 N.E.2d 641 (Ill. App. 1981). CMLP has identified no Illinois cases interpreting this test in the context of online publishing out of the home (or elsewhere).
As a general matter, Illinois courts deem even part-time and supplemental activities done for profit to be business pursuits. On the other hand, Illinois courts have determined that profit-making activities that are temporary or sporadic, or that result in compensation only irregularly, are not business pursuits. See for example the Moore case above.
Therefore, if you live in Illinois, you may be in danger of losing coverage for your online publishing activities if you make money from your website or blog, such as through advertisements or a tip jar, unless those activities are temporary or sporadic.
Note that specific language in a policy might lead a court to a result different from the overall state trend.
Indiana law defines as business pursuit as "a continued or regular activity for the purpose of earning a livelihood." Mid-American Fire & Casualty Co. v. Shoneys, 843 N.E.2d 548 (Ind. App. 2006). CMLP has identified no Indiana cases interpreting this test in the context of online publishing out of the home (or elsewhere).
One Indiana court has held that the a for-profit activity is not a business pursuit if it does not occur continually or regularly, or if making a profit is not the primary motivation. See American Family Mutual Insurance Co. v. Bentley, 352 N.E.2d 860 (Ind. App. 1976). In that case, the insured rented storage space in his home to a third party for money, but there was no evidence that he did so regularly, or that profit was his primary motivation. In other cases, however, Indiana courts have held that an activity is a business pursuit even if the activity is not the insured's primary occupation. See for example the Shoneys case above.
Therefore, if you live in Indiana, you may be in danger of losing coverage for your online publishing activities if you make money from your website or blog, such as through advertisements or a tip jar, unless those activities are temporary or sporadic.
Note that specific language in a policy might lead a court to a result different from the overall state trend.
Massachusetts law defines "business pursuits" as incorporating "two significant elements: profit motive and continuity." Nationwide Mut. Ins. Co. v. Bent, 1999 WL 1203774 (Mass. Super. Nov. 9, 1999). CMLP has identified no Massachusetts cases interpreting this test in the context of online publishing out of the home (or elsewhere). One Massachusetts court has indicated in reasoning not essential to its judgment that the category of business pursuits embraces “[a]ny full or part time activity of any kind engaged in for economic gain." Metro. Prop. & Cas. Ins. v. Fitchburg, 793 N.E.2d 1252 (Mass. App. Ct. 2003).
Therefore, if you live in Massachusetts, you may be in danger of losing coverage for your online publishing activities if you make any money from your website or blog, such as through advertisements or a tip jar, unless those activities are temporary or sporadic. The law in Massachusetts is not clear on this point, however.
Note that specific language in a policy might lead a court to a result different from the overall state trend.
Michigan law defines "business pursuits" as follows:
To constitute a business pursuit, there must be two elements: first, continuity, and secondly, the profit motive; as to the first, there must be a customary engagement or a stated occupation; and, as to the latter, there must be shown to be such activity as a means of livelihood, gainful employment, means of earning a living, procuring subsistence or profit, commercial transactions or engagements.
Riverside Ins. Co. v. Kolonich, 329 N.W.2d 528, 530 (Mich. App. 1982). CMLP has identified no Indiana cases interpreting this test in the context of online publishing out of the home (or elsewhere).
As a general matter, Michigan law excludes from the category of business pursuits activities engaged in as a hobby, when financial gain is only a side consideration. For instance, in the Kolonich case (above), a Michigan appellate court reversed a lower court ruling because the insured person's activities -- teaching ceramic classes in her home, firing ceramics pieces, and selling the occasional piece -- could constitute a hobby rather than an enterprise conducted for profit.
Therefore, if you live in Michigan, you may have an argument that your online publishing activities are not a "business pursuit" if you carry them out as a hobby and your primary motivation is not financial gain, even if you make some money from those activities. Additionally, you might be able to argue that your publishing activities are not sufficiently continuous to constitute a business pursuit, if you engage in them sporadically and they are not part of your "customary engagement" or "stated occupation."
Note that specific language in a policy might lead a court to a result different from the overall state trend.
New Jersey law defines a "business pursuit" as an activity involving "continuity" or "customary engagement" and a "profit motive." Prudential Prop. & Cas. Ins. Co. v. Boylan, 704 A.2d 597, 602 (N.J. Super. 1998). CMLP has identified no New Jersey cases interpreting this test in the context of online publishing out of the home (or elsewhere).
As a general matter, however, the New Jersey courts include nearly all profit-making activities carried out on a regular basis in the category of business pursuits. The activity does not need to be the insured person's sole occupation or means of support, but it must be more than merely sporadic or occasional.
Therefore, if you live in New Jersey, you may be in danger of losing coverage for your online publishing activities if you make money from your website or blog, such as through advertisements or a tip jar, unless those activities are temporary or sporadic.
Note that specific language in a policy might lead a court to a result different from the overall state trend.
New York law defines a "business pursuit" as an activity regularly engaged in with a view toward earning a livelihood or making a profit. In other words, to constitute a business pursuit, there must be two elements: "first, continuity, and secondly, the profit motive." Showler v. Am. Mfrs. Mut. Ins. Co., 261 A.D.2d 896, 897 (N.Y App. Div. 1999). CMLP has identified no New York cases interpreting this test in the context of online publishing out of the home (or elsewhere).
As a general matter, however, the New York courts include nearly all profit-making activities carried out on a regular basis in the category of business pursuits. The activity does not need to be the insured's sole occupation or means of support, but it must be more than merely sporadic or occasional.
Therefore, if you live in New York, you may be in danger of losing coverage for your online publishing activities if you make money from your website or blog, such as through advertisements or a tip jar, unless those activities are temporary or sporadic.
Note that specific language in a policy might lead a court to a result different from the overall state trend.
North Carolina law defines the word "business" in "business pursuit" as "an individual's paramount means of earning a livelihood." North Carolina Farm Bureau Mut. Ins. Co. v Briley, 491 S.E.2d 656, 659 (N.C. App. 1997). CMLP has identified no New York cases interpreting this test in the context of online publishing out of the home (or elsewhere). As a general matter, however, North Carolina courts have declined to include part-time work under the exclusion, at least where the insured also had a separate full-time job.
Therefore, if you live in North Carolina, then you may have a good argument that your online publishing activities are not a business pursuit so long as they do not constitute your primary occupation or source of income.
Note that specific language in a policy might lead a court to a result different from the overall state trend.
Ohio law defines a business pursuit as work "engaged in regularly" which "produce[s] an income." Watkins v. Brown, 646 N.E.2d 485, 488 (Ohio App. 1994). CMLP has identified no Ohio cases interpreting this test in the context of online publishing out of the home (or elsewhere). As a general matter, however, Ohio courts have deemed activities to be business pursuits even when profit was not the primary motive and the amount of money earned was small.
Therefore, if you live in Ohio, you may be in danger of losing coverage for your online publishing activities if you make money from your website or blog, such as through advertisements or a tip jar, unless those activities are temporary or sporadic.
Note that specific language in a policy might lead a court to a result different from the overall state trend.
Therefore, if you live in Pennsylvania, then you may have an argument that your online publishing activities do not constitute a business pursuit if your primary motivation is not financial gain, even if you make some money from those activities.
Note that specific language in a policy might lead a court to a result different from the overall state trend.
Texas law defines a "business pursuit" as incorporating two elements: "(1) continuity or regularity of the activity, and (2) a profit motive, usually as a means of livelihood, gainful employment, earning a living, procuring subsistence or financial gain, a commercial transaction or engagement." Allstate Ins. Co. v. Hallman, 159 S.W.3d 640, 644 (Tex. 2005). CMLP has identified no Texas cases interpreting this test in the context of online publishing out of the home (or elsewhere).
As a general matter, however, Texas courts recognize that "hobbies" are distinct from business pursuits. One court has defined a hobby as "a specialized pursuit, such as stamp collecting, painting, or gardening, that is outside of a person's regular occupation, usually done in a non-professional way as a means of relaxation during leisure time." United Servs. Auto. Assoc. v. Pennington, 810 S.W.2d 777, 779 (Tex. App. 1991). In that case, the insured, a car salesman, bought a horse in order to experiment with new race training methods. The court held that the jury was entitled to view this as a hobby and not a business pursuit, even though the insured admitted that he would have liked to turn the activity into a business in the future.
Therefore, if you live in Texas, you have a good argument that your online publishing activities are not a business pursuit, so long as you can characterize them as a hobby. It will help if your primary motivation for publishing online is not financial gain, and you have other employment.
Note that specific language in a policy might lead a court to a result different from the overall state trend.
Virginia law defines a "business pursuit" as follows:
To constitute a business pursuit, there must be two elements: first, continuity, and, secondly, the profit motive; as to the first, there must be a customary engagement or a stated occupation; and, as to the latter, there must be shown to be such activity as a means of livelihood, gainful employment, means of earning a living, procuring subsistence or profit, commercial transactions or engagements.
Virginia Mut. Ins. Co. v. Hagy, 352 S.E.2d 316, 318 (Va. 1987). CMLP has identified no Virginia cases interpreting this test in the context of online publishing out of the home (or elsewhere).
As a general matter, the Virginia Supreme Court has given a rather broad interpretation to the category of business pursuits. In Hagy (above), the court ruled that an insured person who performed childcare in her home was engaged in a business pursuit as a matter of law, even though she testified that, after experiencing a downturn in her business, her motivation for doing so was "love for the child rather than the prospect of financial gain." The court noted that the childcare operation bore all the outward signs of a business for profit and found that even a small amount of income was sufficient to provide evidence of a "profit motive."
Therefore, if you live in Virginia, you may be in danger of losing coverage for your online publishing activities if you make money from your website or blog, such as through advertisements or a tip jar, unless those activities are temporary or sporadic.
Note that specific language in a policy might lead a court to a result different from the overall state trend.
Washington law defines a "business pursuit" as an activity that is (1) conducted on a regular and continuous basis; and (2) profit-motivated. Stuart v. Am. States Ins. Co., 953 P.2d 462, 465 (Wa. 1998). CMLP has identified no Washington cases interpreting this test in the context of online publishing out of the home (or elsewhere).
As a general matter, however, Washington courts give this test a broad interpretation. In order to be deemed a business pursuit, an activity does not need to be one's sole source of income and does not need to be full-time, nor does the activity need to be motivated solely by profit. "Some" profit motivation is sufficient to make an activity a business pursuit, so long as it is conducted on a regular and continuous basis. See, e.g., Stoughton v. Mutual of Enumclaw, 810 P.2d 80 (Wash. App. 1991).
Therefore, if you live in Washington, you may be in danger of losing coverage for your online publishing activities if you intend to make a profit from your website or blog, such as through advertisements or a tip jar, unless your activities are temporary or sporadic.
Note that specific language in a policy might lead a court to a result different from the overall trend.
CMLP has identified no District of Columbia cases interpreting the "business pursuits" exclusion. If you know of a case on this topic, please contact us.