You and four other families pool your money to buy 50 acres of land. You form an intentional community. Everyone builds their own cabin, but you share a massive communal garden, a commercial kitchen, and a woodworking shop. It’s a utopian dream.
Then, a guest from the city comes to visit for a weekend workshop. They trip over a poorly secured tiller in the communal garden, suffering a traumatic brain injury. The guest’s health insurance company subrogates, launching a $1.5 million personal injury lawsuit against everyone who owns the land. You all call your individual homeowners insurance companies to handle the defense.
The Brutal Truth: Why Standard Policies Deny This Claim
Your personal HO-3 Homeowners Policy is restricted to your specific “Residence Premises”—the cabin you live in and the immediate yard. It does not extend liability coverage to shared, 50-acre agricultural or commercial tracts.
Because you host workshops and share equipment, the insurance company will invoke the Business Pursuits Exclusion and the Farming Exclusion. Standard personal policies do not cover liability arising from commercial farming, communal workspaces, or hosting public events. Furthermore, because the land is likely owned by an LLC or a Trust (to manage the co-ownership), your personal policy will deny the claim because the lawsuit will name the LLC, and your personal policy only defends you, not a corporate entity.
How to Actually Protect Yourself (The Fix)
You cannot insure a commune like a cul-de-sac. It is legally a commercial enterprise and must be insured as such.
- Buy Commercial General Liability (CGL) for the LLC: The LLC or Trust that holds the deed to the 50 acres must purchase a CGL policy. This covers slip-and-falls in the communal areas, injuries in the shared workshops, and defense costs if the entity is sued.
- Insure the Dwellings Separately: Each family must buy their own HO-3 or DP-3 policy for their specific cabin and the immediate footprint of their home to cover their personal property and personal liability within their own walls.
- Add a Commercial Umbrella Policy: A $1 million CGL limit will be exhausted instantly in a traumatic brain injury case. The LLC must purchase a Commercial Umbrella Policy to stack an additional $2 to $5 million in liability coverage on top of the commune.
The Claims Adjuster’s Secret
If we investigate a liability claim on a communal property, we are looking for the “exchange of goods.” If your intentional community sells surplus vegetables at the local farmer’s market, or charges guests $50 to attend a “permaculture workshop,” you are legally a commercial farm and an event venue. Without commercial insurance, we will void your personal coverage the second we see a flyer for your workshop.
The Verdict (TL;DR)
The Risk Level: Extremely High (Joint liability on agricultural/workshop land is a massive exposure). The Solution: Insure the shared land with a Commercial General Liability policy and the individual cabins with personal policies. Estimated Cost: $2,000 to $5,000+ annually for the LLC’s commercial liability, split among the owners.