1. Forms
2. HO
3. HO-07-53

What the form is

The HO 07 53, titled "Exclusion – Personal and Advertising Injury," is an endorsement to a Homeowners Policy. Its primary function is to eliminate coverage for personal and advertising injury liability that may arise from the insured's home-based business activities. This endorsement is specifically designed to be used in conjunction with the HO 07 01 Home Business Insurance Coverage endorsement.

Classes of business it applies to

This endorsement applies to individuals who operate a business from their residence and have the Home Business Insurance Coverage (HO 07 01) added to their homeowners policy. It is not specific to particular industries but rather to the scenario of a home-based business where the insurer deems the personal and advertising injury exposure to be too high to cover under the standard home business endorsement.

Real-world example: An individual runs a small online retail business from home and uses social media extensively for marketing. If the insurer believes this marketing activity poses a significant risk of advertising injury claims (like libel, slander, or copyright infringement), they might require the HO 07 53 endorsement to exclude such claims related to the business.

Special considerations

The HO 07 53 is used when an underwriter perceives an unacceptable exposure for personal and advertising injury related to the nature of the home business. By attaching this endorsement, the insurer clarifies that claims such as libel, slander, invasion of privacy, copyright infringement, or misappropriation of advertising ideas arising from the scheduled business are not covered. It's crucial for both the insured and the agent to understand that this endorsement creates a significant gap in liability coverage for these specific types of business-related injuries.

Real-world example: A freelance writer operating from home who is insured under an HO 07 01 might have the HO 07 53 attached if the insurer is concerned about potential plagiarism or defamation claims. This would mean that if the writer is sued for such an offense related to their business, the homeowners policy with the home business endorsement would not provide defense or coverage for that claim.

Key information for agents and underwriters

Agents: It is vital for agents to clearly explain the implications of this exclusion to insureds who have a home business. If this endorsement is added, the agent should discuss alternative coverage options for personal and advertising injury, such as a separate commercial general liability policy, if the exposure warrants it and the insured desires such coverage. Failure to do so could lead to an errors and omissions (E&O) exposure for the agent if the insured later suffers an uncovered personal or advertising injury claim related to their business.

Underwriters: This endorsement is a tool to manage risk when underwriting home-based businesses with higher-than-average personal and advertising injury exposures. The decision to attach this endorsement should be based on a thorough assessment of the business's activities, particularly its marketing, advertising, and public interaction. Documenting the rationale for requiring this exclusion is important. Underwriters should also be aware that this form deletes all coverage for personal and advertising injury related to the business described in the HO 07 01 schedule.