Your Homeowner’s Policy and Liability for Your Little Child Entrepreneur

child entrepreneur selling lemonade

Three of our grandchildren were sitting in their mother’s car as she went into a consignment store where she displays for sale little childrens’ clothing. As they sat there they noticed as cars went by many people drinking from their sippy cups. They got the great idea to ask the owner of the consignment store if they could set up a lemonade stand in her parking lot right next to Highway 200 in North Idaho. It is in a very slow-moving traffic area on the highway with perfect visibility either way you approach the parking lot. Now, I know lemonade stands are the million dollar dream maker of many children but the special thing about this one is how the kids were going to market their lemonade. They decided not only would they sell the lemonade, but since they enjoy baking they would bake cookies to sell from their stand as well. They went into the store and presented their business plan to the owner, and upon seeing their enthusiasm she responded positively to their request.

The next day they set up their stand with a big sign which read “lemonade 50 cents, one cookie 50 cents, one cookie and a lemonade for $1.00.” They sold $50.00 worth!

Two others bought snow shovels last winter and advertised their services for snow removal from sidewalks and roofs.

Still two others have earned enough money baby sitting to pay for their own school clothes. Needless to say, these kids don’t have an entitlement mentality.

What would happen if due to their negligence while selling, shoveling, or babysitting something or someone got injured? Your homeowner policy has a wonderful little provision in it just for those enterprising young people. The policy language defines the business and then includes a portion which states a business definition does not include newspaper delivery, lawn care, or other activities performed by a self-employed minor on a part-time basis or child care services provided by any insured if the number of children is below a certain number. The policy I am most familiar with identifies that number as six or fewer for fewer than 31 days during the policy period. Part-time child care services provided by any insured who is a minor is not considered a business. (from Farm Bureau Insurance Company City Squire policy, p. 1 of 38.)

So if your son or daughter under age 18 were to be babysitting at someone else’s residence and they were to be the cause of bodily injury or property damage to those they were babysitting or start a fire in the venue, your homeowner policy liability limits would extend to them. This would be the case because your homeowner liability goes wherever you or your minor children might be in the world. Kinda nice to know if your minor child threw a shovel full of snow on to a bypasser causing them bodily harm, the damage would be covered.

(Updated 2/20/2018)

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