1. Forms
2. HO
3. HO-24-43

What the form is

The HO 24 43, titled "Permitted Incidental Occupancies - Other Residences," is a homeowners insurance endorsement that provides liability coverage for certain business activities conducted by an insured at a location other than their primary residence premises. Essentially, it extends Section II (Liability Coverages) of the homeowners policy to cover these specified incidental business pursuits at a secondary location that is scheduled on the endorsement. Without this endorsement, business activities, especially those at other locations, are typically excluded or severely limited under a standard homeowners policy.

Classes of business it applies to

This endorsement is designed for homeowners who have an 'incidental' business that operates out of a secondary residence they own or rent. The key term is "incidental," meaning the business should be subordinate to the use of the primary dwelling as a residence and not a large-scale commercial operation. Examples include:

• An insured who has a small home office for freelance writing or consulting at their vacation cabin.
• An individual who occasionally uses a second apartment for a hobby that sometimes generates income, like crafting or tutoring.
• A salesperson who uses a room at a secondary residence they own to occasionally meet clients or do paperwork.

The nature of the business and the address of the other residence must be specifically described in the endorsement.

Special considerations

There are several important points to consider when using this endorsement:

• Definition of "Incidental": The business must genuinely be incidental in nature. A full-fledged retail store or a manufacturing operation at another residence would likely not qualify.
• Scheduled Premises: The endorsement only applies to the specific business activities and the particular "other residence" location that are listed in the schedule of the endorsement.
• Employee Exclusion: The liability coverage provided by this endorsement generally does not apply to bodily injury to an employee of the insured arising out of the business, except for residence employees performing their usual duties.
• Policy Exclusions: Other standard homeowners policy exclusions may still apply unless specifically modified by this endorsement.
• State Variations: In some states, like Virginia, having this endorsement attached to a policy can affect the notice periods required for cancellation or nonrenewal of the policy.

Key information for agents and underwriters

For Agents:

• Thoroughly discuss the nature and scope of the client's business activities at the other residence to ensure it qualifies as "incidental."
• Accurately describe the business and the full address of the "other residence" on the endorsement schedule.
• Explain the limitations of the coverage, particularly the employee exclusion and that it only applies to the scheduled premises and business.
• Advise clients that if the business grows or changes significantly, the coverage needs to be reviewed.

For Underwriters:

• Carefully review the description of the business to assess the liability exposure. Information such as the number of employees (if any), any physical alterations to the other residence for business purposes, and the number of clients visiting the location weekly is crucial for risk assessment.
• Verify that the business is truly "incidental" and does not represent a commercial risk that should be covered by a separate commercial liability policy.
• Ensure the "other residence" is properly identified and that the underlying homeowners policy covers the primary residence premises.
• Consider the type of business; some incidental occupancies (e.g., those involving hazardous materials or significant public interaction) might still be unacceptable risks even with this endorsement.