Examines coverage denial under a tenant insurance policy's business exclusion when undisclosed home-based cake production causes unit damage and triggers strata insurer subrogation in British Columbia.
Faculty of Insurance
Coverage Gaps When Home-Based Business Activity Voids Tenant Insurance
What this course covers
Scenario
A first-generation entrepreneur launched a custom cake business from her 2-bedroom condominium unit in Burnaby, British Columbia in May 2026. Operating through social media and a basic website, she projected $42,000 in first-year revenue from orders delivered across Metro Vancouver. The operation included a part-time assistant working 2 afternoons weekly during peak periods.
The unit's strata corporation prohibited commercial activity, and her existing tenant insurance policy contained a standard business activity exclusion. When a delivery mishap resulted in a customer's allergic reaction and a kitchen fire caused $18,000 in unit damage during the same month, both claims triggered coverage denials citing the undisclosed commercial use. The strata corporation's own insurance carrier initiated subrogation proceedings against the unit owner personally.
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