Babysitting is a “business pursuit”
April, 2002
In Leanderson v. Farmers Ins. Co. of Wash., 43 P.3d 1284 (Wash.Ct.App. 2002), the Hawkins' babysitter, Crystal Leanderson, started a fire in the Hawkins' house. The Hawkins' insurance company, The Grange Insurance Association ("The Grange"), paid the loss. The Grange then made a claim against the Leandersons, who were insured by Farmers. Farmers denied coverage based upon a business pursuits exclusion in the Leandersons' policy. The Grange then brought suit in its insureds' names.
Farmers' policy included the following exclusion:
We do not cover bodily injury or property damage . . . [a]rising from or during the course of business pursuits of an insured. But we do cover . . . part-time services performed directly by an insured under age 21 who is a resident of your household.
The policy defined the term "part-time" to mean no more than 20 hours per week.
Crystal had taken a summer position as the Hawkins' babysitter, working four to five days a week, eight to ten hours a day. The Grange first argued that babysitting is not a "business pursuit," as that undefined term is used in the policy. The court noted that Washington courts recognize an activity as a business pursuit if (1) it is conducted on a regular or continuous basis; and (2) it is profit motivated. In this case, the court said, reasonable minds could not disagree on either element.
The Grange next argued that Crystal was a "part-time" babysitter – if her total babysitting hours for the summer were divided by 12, apparently the number of weeks in the summer. The court rejected that argument, noting that 4-5 days times 8-10 hours is, by any calculation, greater than 20 hours per week.
An endorsement in the Farmers' policy also excluded coverage for property damage "[r]esulting from the legal liability of any insured because of home care services provided to any person on a regular basis . . . ." "Regular basis" was defined to mean more than 20 hours per week. The trial court had not considered this argument, which by its terms does not require a profit motive. The Washington Court of Appeals noted that it could hear this argument on appeal, even though it was not raised in the trial court, because it would provide a basis upon which to affirm the trial court's decision. However, because the appeals court had already ruled in Farmers' favor based upon the business pursuits exclusion, the court did not need to consider this argument.