Are you getting tripped up on the insurance because it’s a house or the fact that you own one but the other is a business? If you have a backyard graduation party at your house and a guest falls and breaks their leg your homeowners covers that. If you decide to host your graduation party in a room at the local Applebee’s and a guest trips and breaks their leg, Applebee’s covers that. That makes sense right? A guest isn’t going to sue party host for conditions at another’s business.So the people who come to a family get together are not "day guests"? Sorry, that doesn't make sense to me.
Now Applebee’s insurance covers normal business activities so a trip a fall while people are enjoying a meal is covered. If Applebee’s decides to hold a special event and bring in a bounce house party the premises are no longer being used as insured and they’d need an extra rider. Otherwise someone getting hurt on a bounce house party is outside normal coverage.
When you rent a home it comes with insurance to cover normal vacation stays. You start bringing in 30x more people, outside vendors, and are using the home for something other than what the business is, that rental homeowners is not going to cover the event. Its not that it’s a wedding, it’s that it is ANY event at another business that you are not covered at and which does not carry special event coverage (and it needs that coverage as a BUSINESS). Having other vendors really ups the risk since an on the job injury by Joes Catering or Megan’s Flowers are going to pit business insurances against each other.