If your child has a “business” they’re getting paid for, such as babysitting, lawn mowing, snow shoveling, or car washing, your basic homeowners insurance policy doesn’t cover them?
For many older children and teens, babysitting, mowing lawns, shoveling snow or washing cars is their first ever job. It’s a great way for kids to test the entrepreneurial waters, learn responsibility and begin to understand finances. But what happens if your child damages a customer’s property or injures someone while performing one of these duties? Does your homeowners insurance policy cover this type of incident?
Unfortunately, a basic homeowners insurance policy often does not extend to business-related or income-generating activities. So, if your child’s business does cause damage or injury and a customer files a claim, that customer’s homeowners policy would likely go back against you (the family) of the child’s business. However, your own homeowners policy is unlikely to pay for any losses or defense costs, leaving you to pay damages out of pocket with an uninsured claim.
If you’re the parents of a child running a business, it’s important that you talk with your insurance agent about how you can stay financially protected against any claims of damage or injury.
Have questions? Contact us to speak with a licensed insurance professional.