BUSINESS ACTIVITIES OF MINORS

(July 2019)

The ISO Personal Umbrella Policy includes a number of important exceptions. Concerning the exceptions to the business activity exclusion, the policy can be interpreted as having a primary concern with excluding business-related exposures by adults.

Coverage is provided for business activities involving non-adults as long as the activities are in the nature of those commonly pursued by minors and is done on a part-time basis. Since most minors are full-time students, nearly any “business” activity should qualify as a part-time venture. However, the policy language creates a question about what type of “business’ activities are common to minors. Youths have different areas of interest and greater access to technology, so they may have gone far beyond the days of baby-sitting, running lemonade stands and mowing lawns. There are wide arrays of legitimate “business” activities of minors that may qualify for coverage:

Examples: · A 20-year-old college student who lives in the insured household and receives pay for tutoring high school students in math and Spanish · A 17-year-old who delivers pizzas · A 15-year-old who baby-sits after school, during weekday evenings and on weekends · Minors (under 18) or full-time students under 21 who: - sell door-to-door as a summer job - work as lifeguards at a beach or pool - mow lawns or perform snow removal - perform house-sitting or house-cleaning services - give lessons in music, arts or crafts - perform at parties as a “disc jockey” or in a band - operate an interior/exterior painting service - design Web sites for individuals and businesses - offer sports instructions or assist at (vacation or summer) sports camps/clinics

It would be interesting to examine the circumstances of a claim that might be denied because the activity is considered uncommon.

Example: Bill and Marge Modum are insured by an ISO Personal Umbrella policy. Their son, PC (who is 16 years old) designs and maintains Web sites. The Modums are sued by: 1. A group of parents who find out that PC is responsible for designing and posting the contents of a Web site that advertises an escort service consisting of cheerleaders from his high school 2. A competitor of a “temporary employee” business for which PC designed a Web site. The site states that the competitor uses unqualified workers 3. One of PC’s clients, six months after the site was published, who discovers that the site has the wrong mailing, fax, e-mail and phone numbers. They claim a substantial loss in income since their Internet service provider’s records show that the site gets hundreds of visitors each week. The situations arising out of PC’s part-time activity fall in a gray area that may have to be both defended and paid under the umbrella policy.