Insurance for gaming
When we think about home based businesses, we generally have an idea of something akin to a hair stylist or direct salesperson, someone who may or may not have an office or official workspace but also sometimes has clients or materials at their house to perform their services or sell their wares. But the world is changing, and now making money from home is something that can be achieved with nothing more than a computer, a game platform, and an internet connection.
Competitive gaming has become a multi-billion dollar industry over the past couple of years, with teams becoming well known within their respective circles and prize money stretching into the millions of dollars. So at what point does gaming change from a hobby to a home based business, one where you may need to obtain cyber liability or lost profits?
When does your hobby become your job?
The short answer is once there is money being made at it. While making a couple dollars a year from donations while streaming is not a huge loss you may think, if it is not declared as such on your insurance policy that this is occurring on premises you may be in for a headache at the time of loss. In many cases there are exclusions for personal property used in whole or in part for business use which while you may consider it a hobby, if there is money being made at it there may be risk. In many cases it is as simple as declaring office use on your policy. Extending coverage for a home based business on a home insurance policy typically does not cover cyber liability, but will allow you to operate out of the house up to a set max gross income, which may be different depending on your insurance provider.
Where the line blurs further is when do you need to have commercial insurance as a self employed business person, where you may need cyber liability and lost profits, extended coverage for computers pertaining to the business, employee dishonesty coverage if someone helps you out for pay, benefits extensions for employees, etc.
Will my home insurance cover me?
This would be a subjective time frame where you are closing in on the line of making too much as a home based business for the coverage under your home insurance to apply and beginning to gain popularity and visitors to your website or platform of choice to watch you or your team play. A prudent individual would have anti-virus programs installed or some sort of internet defense program to mask location to prevent “swatting” (the act of another person maliciously calling the police on your location or another, triangulated through your IP address) or other undesirable activities, they may not have anything in place to protect the identities of people who visit their site, or purchase their products.
Many of the more popular youtube channels have online stores for merchandise, creating t-shirts for their fans to wear. Once this is a viable option, now you have stock to be concerned about. What happens if you have a fire and these go up in flames? Without a policy in place, that would be lost money.
What if you have an injury and are unable to play games for a while? You would be in a situation of lost profits due to your injury. You may have professional liability to consider or cases of defamation at the high end.
The short news on this is it is no longer a fringe activity. In fact, many schools around the world are now offering scholarships to people who compete in e-sports with the same “full rides” through school as a traditional sport scholarship might. They are hedging their bets that gaming and e-sports will continue to grow and be a profitable form of business for those students as they continue in their lives.
If, however, you are like me and just game for the hobby of it without monetizing content through a third party site like youtube or twitch, or making brand deals, there is no issue for insurance purposes.
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