Georgia Property & Casualty Practice Exam

What endorsement can provide coverage for incidental occupancies in a home business?

1. Home Day Care Coverage

2. Permitted incidental occupancies endorsement

3. Business Owner's Policy addition

4. Personal Liability endorsement

The correct answer is: Permitted incidental occupancies endorsement

The permitted incidental occupancies endorsement is specifically designed to expand coverage for particular business activities that may occur within a residential property without fundamentally altering the primary use of the home. This endorsement recognizes that many homeowners engage in minor business activities, such as classes, consulting, or other small-scale commercial endeavors, and provides coverage for these issues that would not be included in a standard homeowner's policy. In many cases, homeowners may not realize that their current policy excludes coverage for certain business-related risks, which could leave them vulnerable. By adding this endorsement, homeowners can protect themselves from potential liability and property damage issues that arise from their incidental business activities. This endorsement is more tailored for home businesses than options like the Home Day Care Coverage, which specifically addresses the unique risks associated with running a daycare in a residential setting. Similarly, a Business Owner’s Policy addition is generally suited for larger or more formal business operations rather than incidental activities. A Personal Liability endorsement, while it does provide additional liability protection, does not specifically cater to business-related risks. Thus, the permitted incidental occupancies endorsement fills a crucial gap for homeowners who engage in low-scale business activities.