The most important — and often toughest — part of an adjuster'sjob is determining coverage. Each month, Claims publishes acoverage question asked by an insurance professional, along with ananswer provided by the dedicated editorial staff of FC&S Online(which, like Claims, is a division of the National UnderwriterCompany). This month, we take a look at coverage issues forinjuries sustained by a guest at a homeowner's residence.

Question: The policyholder was hosting a MaryKay make-up party. Once the party was over and the guests wereleaving, the claimant ran through the backyard toward the house tonotify another guest that they needed to move her car. In theprocess, the claimant fell and injured a tendon in her ankle andreceived some bad bruising. Under the HO 3 edition 10 00, “bodilyinjury arising out of or in connection with a business conductedfrom an insured location, whether or not the business is owned oroperated by the insured or employs an insured, is excluded.” Wouldyou consider hosting a Mary Kay party a business? The policyholderwas not paid to host the party; she only received free products anddiscount coupons.

Answer: We don't believe the exclusion appliesin this instance for the following reasons. First, the insured didnot receive anything for holding the party other than some freeproducts and discounts. The free products are in the way of gifts;the discounts simply mean the hostess gets to spend money.