Insurance Exclusions for Business Pursuits

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.


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