Business Pursuits Exclusion in Michigan

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.


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