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8/21/2012 - Are kid-run businesses covered?


Kid-run lemonade stands may be covered by homeowners insurance plans.

Perhaps in an effort to become the next great entrepreneur, many young children like to try their hand at the working world by starting their own mini business, such as by opening up a lemonade stand at the end of the driveway or washing neighbors' cars. Because accidents happen, though, their operations may result in a problem, where a vehicle is inadvertently damaged, for example.

Fortunately, most homeowners insurance policies have provisions that provide for this.

Insurance expert Christine Barlow told Insurance.com that while most homeowners plans exclude coverage for business-related activities, that may not apply for kid-run businesses, as exceptions are often made for household members who are under the age of 21. However, this may not apply if there are other people or "employees" who work there.

Barlow noted that because policies differ, parents should check with their insurer before assuming anything.

"Everything hinges on the policy's wording," Barlow told Insurance.com.

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