Section I Perils Insured Against

Section I Exclusions

Section I Conditions

Section II Liability Coverages

Section II Exclusions

Section II Additional Coverages

Section II Conditions, Sections I and II Conditions

AGREEMENT We will provide the insurance described in this Policy in return for the premium and compliance with all applicable provisions of this Policy.

Analysis

The form begins with the standard insuring agreement – the insurer agrees to provide coverage in return for the premium paid by the insured and compliance with all applicable provisions of the policy. The provisions are important, because if the insured does not comply with all the policy provisions, or conditions, coverage could be denied.

DEFINITIONS

A. In this Policy, "you" and "your" refer to the "named insured" shown in the Declarations and the spouse if a resident of the same household. "We", "us" and "our" refer to the company providing this insurance. B. In addition, certain words and phrases are defined as follows:

1. "Aircraft Liability", "Hovercraft Liability", "Motor Vehicle Liability" and "Watercraft Liability", subject to the provisions in b. below, mean the following:

a. Liability for "bodily injury" or "property damage" arising out of the:

(1) Ownership of such vehicle or craft by an "insured"; (2) Maintenance, occupancy, operation, use, loading or unloading of:

(a) An aircraft, hovercraft or watercraft by any person; or (b) A motor vehicle by an "insured";

(3) Entrustment of such vehicle or craft by an "insured" to any person; (4) Failure to supervise or negligent supervision of any person involving such vehicle or craft by an "insured"; or (5) Vicarious liability, whether or not imposed by law, for the actions of a child or minor involving such vehicle or craft.

b. For the purpose of this definition:

(1) Aircraft means any contrivance used or designed for flight except model or hobby aircraft not used or designed to carry people or cargo; (2) Hovercraft means a self-propelled motorized ground effect vehicle and includes, but is not limited to, flarecraft and air cushion vehicles; (3) Watercraft means a craft principally designed to be propelled on or in water by wind, engine power or electric motor, except model or hobby watercraft not used or designed to carry people or cargo; and (4) Motor vehicle means a "motor vehicle" as defined in 11. below.

Analysis

There are few changes in these first few definitions, and all the definitions closely mirror the homeowners and the tenants forms. The definitions begin with an explanation of "you" and "your" as the "named insured" and resident spouse shown in the declarations. "We", "us", and "our" refer to the insurance company as always.

"Aircraft Liability", "Hovercraft Liability", "Motor Vehicle Liability" and "Watercraft Liability" are then explained. Together the terms mean liability for injury or property damage arising out of use of any of these vehicles, that arises out of the ownership, maintenance, occupance, operation, use, loading or unloading of such vehicles by any person or a motor vehicle by an "insured". Likewise, the entrustment of such vehicle to another person, failure to supervise or negligent supervision of another while using such vehicles, or vicarious liability, whether or not imposed by law for actions of a child or minor using such a vehicle is all part of vehicle liability.

The form is designed to provide coverage for personal property, the condo owners liability regarding the residence, and personal liability, but not liability related to any vehicles. While there are some exceptions which will be discussed later, aircraft, hovercraft, watercraft, and motor vehicle liability needs to be defined.

The policy then defines aircraft, hovercraft and watercraft. A change has been made to the definition of watercraft to show that there is an exception for model or hobby watercraft not used or designed to carry people or cargo. Motor vehicles are defined separately.

2. "Bodily injury" means bodily harm, sickness or disease, including required care, loss of services and death that results. 3. "Business" means:

a. A trade, profession or occupation engaged in on a full-time, part-time or occasional basis; b. "Home-sharing host activities"; c. The leasing of the mineral rights of an "insured location"; or d. Any other activity engaged in for money or other compensation, except the following:

(1) One or more activities, not described in (2) through (4) below, for which no "insured" receives more than $5,000 in total compensation for the 12 months before the beginning of the policy period; (2) Volunteer activities for which no money is received other than payment for expenses incurred to perform the activity; (3) Providing home day care services for which no compensation is received, other than the mutual exchange of such services; or (4) The rendering of home day care services to a relative of an "insured".

Analysis

"Bodily injury" and "Business" are the next definitions, and there have been changes to the definition of "business". "Bodily injury" is the same as before, bodily harm, sickness or disease, required care, loss of services and resultant death. The "bodily injury" most often comes into play if someone is injured while visiting an insured and is injured on the property or some action of the insured results in injury to another party that would be covered under Section II.

The definition of "business" now includes "home-sharing host activities" which is a new definition in and of itself, and the leasing of mineral rights of an "insured location". Coverage is excluded for both such activities as they now fall under the definition of "business". The standard exceptions for activity bringing in less than $5,000 for the preceding twelve months before the effective date, volunteer activity, home day care for no compensation other than exchange of services, or rendering of day care services to a relative apply. These activities are not considered to be "business" activities.

4. "Cannabis" means:

a. Any good or product that consists of or contains any amount of Tetrahydrocannabinol (THC) or any other cannabinoid, regardless of whether any such THC or cannabinoid is natural or synthetic. b. Paragraph 4.a. above includes, but is not limited to, any of the following containing such THC or cannabinoid:

(1) Any plant of the genus Cannabis L., or any part thereof, such as seeds, stems, flowers, stalks and roots; or (2) Any compound, by-product, extract, derivative, mixture or combination, such as:

(a) Resin, oil or wax; (b) Hash or hemp; or (c) Infused liquid or edible cannabis; whether or not derived from any plant or part of any plant set forth in Paragraph 4.b.(1) above.

c. Paragraph 4.a. above includes, but is not limited to, marijuana.

5. "Employee" means an employee of an "insured", or an employee leased to an "insured" by a labor leasing firm under an agreement between an "insured" and the labor leasing firm, whose duties are other than those performed by a "residence employee".

Analysis

As more and more states legalize the use of cannabis for medicinal and recreational purposes, coverage becomes an issue. Therefore, "cannabis" is added to the homeowners definitions so that the issue can be addressed head-on. Any good or product that contains any amount of Tetrahydrocannabinol (THC) is considered to be cannabis, whether it's natural or synthetic. Even though hemp is considered to be different from cannabis, it is the same plant, just with lower amounts of THC. Regardless, the policy treats any amount of THC, natural or synthetic, as cannabis.

The policy goes on to explain that "cannabis" includes plants of the genus Cannabis L., or any part thereof including stalks, stems, seeds, flowers and roots, and any compound by-product, extract, derivative, mixture or combination. Examples include but are not limited to resin, oil, wax, hash, hemp, infused liquid or edible cannabis, whether or not derived from any plant or plant part as listed. Lastly, the policy states that marijuana is included as "cannabis". This ensures that there is no ambiguity about what the policy considers cannabis to be.

The next definition, "employee", has not changed. It is an employee of an insured or an employee leased to an insured by a labor leasing firm under an agreement, as long as the employee's duties are not those of "residence employees". A residence employee is someone hired to help maintain the premises, such as a maid, gardener, or handyman. As long as the "employee" is performing tasks not related to household maintenance, they are considered "employees".

6. "Home-sharing host activities" means:

a. The:

(1) Rental or holding for rental; or (2) Mutual exchange of services; of the "residence premises", in whole or in part, by an "insured" to a "home-sharing occupant" through the use of a "home-sharing network platform"; and b. Any other related property or services made available by an "insured" for use during such:

(1) Rental; or (2) Mutual exchange of services; except those property or services provided by another party.

7. "Home-sharing network platform" means an online-enabled application, web site or digital network that:

a. Is used for the purpose of facilitating, for money, mutual exchange of services or other compensation, the rental of a dwelling or other structure, in whole or in part; and b. Allows for the agreement and compensation with respect to such rental to be transacted through such online-enabled application, web site or digital network.

8. "Home-sharing occupant" means a person, other than an "insured", who:

a. Has entered into an agreement or arranged compensation with an "insured" through the use of a "home-sharing network platform" for "home-sharing host activities"; or

b. Is accompanying or staying with a person described in Paragraph 8.a. above under such "home-sharing host activities".

9. "Insured" means:

a. You and residents of your household who are:

(1) Your relatives; or (2) Other persons under the age of 21 and in your care or the care of a resident of your household who is your relative;

b. A student enrolled in school full-time, as defined by the school, who was a resident of your household before moving out to attend school, provided the student is under the age of:

(1) 24 and your relative; or (2) 21 and in your care or the care of a resident of your household who is your relative; or

c. Under Section II:

(1) With respect to animals or watercraft to which this Policy applies, any person or organization legally responsible for these animals or watercraft which are owned by you or any person described in 9.a. or b. "Insured" does not mean a person or organization using or having custody of these animals or watercraft in the course of any "business" or without consent of the owner; or (2) With respect to a "motor vehicle" to which this Policy applies:

(a) Persons while engaged in your employ or that of any person described in 9.a. or b.; or (b) Other persons using the vehicle on an "insured location" with your consent. Under both Sections I and II, when the word an immediately precedes the word "insured", the words an "insured" together mean one or more "insureds".

Analysis

Once ride-sharing became popular, the next thing was home-sharing. While plenty of people have always rented out a room or part of a dwelling to a roomer or boarder, the invention of smartphones made it much easier for people to rent out their dwelling or find a place to rent. However, as with the homeowners policy, there are concerns with an insured renting the property to others, so definitions surrounding home-sharing have been added in order to clarify coverage or exclusions.

"Home-sharing host activities" are those activities that involve the renting or holding for rental, or the mutual exchange of services, of the "residence premises" by an "insured" to a "home-sharing occupant" through the use of a smartphone app known as a "home-sharing network platform". Included as host activities are other related property or services made available to the occupant during the rental period or period of mutual exchange of services except those provided by another party. If an insured signs up with Airbnb or Vrbo to rent out his condo while he winters in Florida, then that rental is a "home-sharing host activity". The insured might provide sleds or snowmobiles for the occupant to use; that would be related property to the host activities. Services provided by an other party that do not fall into the host activities would be a maid service paid for by the insured. The mutual exchange of services would be if the insured lets someone use his condo for a certain period of time in exchange for using that person's property for a period of time – no money changes hands, but the insured with a condo at the beach goes to the mountains for a week while the person with the mountain home goes to the beach for a week.

"Home-sharing network platform" is the online application, website or digital network through which an insured posts his property as available for rent, and coordinates with an individual to come to stay in the insured's condo for money, mutual exchange of services or other compensation. The exchange of money and all arrangements are made through the online application, website or digital network.

The "home-sharing occupant" is the person who has entered an agreement through the platform to rent the insured's property, or is staying with the person who made the arrangements through the platform for staying at the insureds property. An insured posts his three bedroom condo at the beach for rental. A group of friends is planning a beach trip, and one of the members of the group sees the posting and makes the arrangements with the insured through the platform for the rental of the condo. The person who made the arrangements is considered a "home-sharing occupant" as are his friends that come along on the beach trip, even though none of them accessed the platform or had any contact with the insured. They are still "home-sharing occupants".

The definition of "insured" has not changed; the "insured" is the owner of the property as well as resident relatives of the property, or persons under the age of 21 and in the care of a resident relative, or a student in school full-time who was a resident before leaving for school and is under the age of 24 and is a relative, or if the person is under the age of 21 and is in the care of a resident relative.

The definition of "insured" expands some when it comes to the liability portion of the policy. Under Section II, any person or organization legally responsible for animals or watercraft owned by an insured is an insured as long as the person is not in the course of a "business". So if the insured's neighbor is dog sitting and the dog bites someone, there is coverage under the policy for the neighbor's liability. However, if the dog is being cared for by a professional pet sitter working for a company, then that person is in the course of "business" and coverage would not apply.

Liability for "motor vehicles" is addressed here as well – if a person is employed by an "insured" or other people using the vehicle on an "insured location" with the insured's consent, then those people are considered to be "insureds".

The policy then specifies that under both Sections I and II, when the word 'an' appears in front of the word "insured", that the phrase an "insured" means one or more "insureds". This is to make it clear when the policy could be referring to more than the "named insured".

10. "Insured location" means:

a. The "residence premises"; b. The part of other premises, other structures and grounds used by you as a residence; and

(1) Which is shown in the Declarations; or (2) Which is acquired by you during the policy period for your use as a residence;

c. Any premises used by you in connection with a premises described in a. and b. above; d. Any part of a premises:

(1) Not owned by an "insured"; and (2) Where an "insured" is temporarily residing;

e. Vacant land, other than farm land, owned by or rented to an "insured"; f. Land owned by or rented to an "insured" on which a one-, two-, three- or four-family dwelling is being built as a residence for an "insured"; g. Individual or family cemetery plots or burial vaults of an "insured"; or h. Any part of a premises occasionally rented to an "insured" for other than "business" use.

11. "Motor vehicle" means:

a. A land or amphibious vehicle that is self-propelled or capable of being self-propelled; or b. Any trailer or semitrailer which is being carried on, towed by or hitched for towing by a vehicle described in 11.a. above.

12. "Occurrence" means an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results, during the policy period, in:

a. "Bodily injury"; or b. "Property damage".

13. "Property damage" means physical injury to, destruction of or loss of use of tangible property. 14. "Residence employee" means:

a. An employee of an "insured", or an employee leased to an "insured" by a labor leasing firm, under an agreement between an "insured" and the labor leasing firm, whose duties are related to the maintenance or use of the "residence premises", including household or domestic services; or b. One who performs similar duties elsewhere not related to the "business" of an "insured".

A "residence employee" does not include a temporary employee who is furnished to an "insured" to substitute for a permanent "residence employee" on leave or to meet seasonal or short-term workload conditions.

15. "Residence premises" means the unit where you reside shown as the "residence premises" in the Declarations.

C. In this Policy, the terms:

1. Roomer; 2. Boarder; 3. Tenant; or 4. Guest; do not include a "home-sharing occupant".

Analysis

The next set of definitions have a few minor changes. The definition of "insured location" remains the same, and includes the "residence premises" as well as the part of other premises used as a residence and that is either shown in the declarations or is acquired by the insured during the policy period. If an insured buys a new property during the policy period with plans to move, that new premises is considered a "residence premises".

Likewise, any premises used in connection with the "residence premises" and property shown in the declarations or acquired during the policy term is part of the "insured location", as is any part of a premises not owned by the insured but where the insured is temporarily living. This could be a rental at the beach, a hotel room, or similar lodgings.

Land is also considered an "insured location" if it is vacant land other than farm land owned or rented to an "insured", as well as owned or rented land where an "insured" is having a dwelling built as a residence for the "insured". It is not uncommon for people to have houses custom built; as long as the residence is for a one, two, three or four-family dwelling, it would be considered part of the "insured location".

Lastly, family or individual cemetery plots or burial vaults of an insured are "insured locations", as are parts of a premises that the "insured" occasionally rents for other than "business" use. An insured may occasionally rent space to create large paintings or work on other projects that he doesn't have room to do at home.

The definition of "motor vehicle" has been updated for clarification. Land or amphibious vehicles that are self-propelled or capable of being self-propelled, as well as any trailer that can be carried on, towed by or hitched to such a vehicle is considered a "motor vehicle". The definition is important so that exclusions can be clearly made for such equipment.

The definition of "occurrence" is important in the liability section of the policy. The definition has not changed, and is an accident, including continuous or repeated exposure to substantially the same general harmful conditions, that results during the policy period in "bodily injury" or "property damage". Remember that "bodily harm" is harm, sickness or disease, and "property damage", which is the next definition, is physical injury to, destruction of, or loss of use of tangible property. These definitions have not changed.

The distinction between "employee" and "residence employee" is important. "Residence employees" are employees whose duties are related to the maintenance or use of the "residence premises", including household or domestic services. The employee may still be leased to an "insured" by a labor leasing firm, but the tasks are strictly related to the maintenance of the "residence premises". A "residence employee" may also perform similar duties at a different location as long as it is not related to the "business" of an "insured". If an insured starts a cleaning service, employees of that cleaning service cannot be considered "residence employees" under the condo policy.

The last definition in the policy is "residence premises", which is the unit where the insured resides and is shown as the "residence premises" in the declarations. It then goes on to make a clarification, that roomers, boarders, tenants, or guests do not include "home-sharing occupants". There is some coverage for roomers, boarders, tenants and guests depending on the coverage, but the "Home-sharing occupants" are not the same as roomers, boarders, tenants or guests and therefore a distinction must be made. A roomer, boarder or tenant is likely to be at the residence for an extended period of time, while a guest will be there a short time and will make no payment to the insured.

Includes copyrighted material of Insurance Services Office, Inc., with its permission.