What Is a Commercial Package Policy?
A commercial package policy can be looked at as a premium version of a business owners policy (BOP). A CPP offers more advanced coverage for business owners with more sophisticated liability and property risks to address.
While a typical BOP can provide most small and medium-sized businesses with the basic liability and property coverage they need, a CPP is designed to cover larger companies or companies that have more complex or specific business risks who need their coverage to be more robust and detailed.
A CPP allows businesses to combine premium general liability, commercial property, business interruption, and any other corresponding coverage they may need into one convenient package.
The main advantage of a CPP is that it provides more flexibility and coverage options. A BOP will almost always offer the same essential coverages such as commercial property and general liability. However, a CPP can include those coverages but it doesn’t need to, meaning that businesses can basically design their CPP from scratch to include only the policies that they need.
And no matter which policies you include in the package, it works in the same way that a BOP works, in the sense that you are going to pay less for these policies as a bundle than you would when buying them individually.
While a CPP is certainly much more flexible than a BOP, it also has some limits. Businesses can include policies such as commercial auto, employment practices liability, and professional liability in their CPP. However, more specialized policies such as key person and directors & officers insurance cannot be included.
What Are the Main Benefits of a CPP?
The greatest benefit of a CPP is that is truly customizable and enables businesses with unique risk profiles to get insured properly while saving money.
When you buy a CPP that includes general liability, property, and auto insurance, there are going to be limits on the coverage that each of these policies provides. However, a CPP gives you the flexibility to incorporate additional policies and endorsem*nts into the package in order to give your company greater protection.
For example, you can add inland marine coverage to your commercial auto policy, or you can add crime insurance to complement your property policy to ensure your business property from risks such as employee theft.
Therefore, the main advantage and benefit of a CPP is that it provides flexibility. If your business has very specific risks and doesn’t really need typical business insurance coverage, CPP provides an easy way for you to design the insurance program you need to tend to your specific business needs. Other specialty coverages that businesses commonly introduce to their CPP include equipment breakdown, pollution liability, and umbrella insurance, among others.
Which Business Wouldn’t Benefit from a CPP?
Even though you can’t really say that there are businesses that won’t benefit from receiving the protection that a CPP can offer them, there certainly are businesses that don’t have a reason to purchase one.
Small businesses that don’t have a lot of property or many employees and companies that have a very basic risk profile would best benefit from a BOP. Getting a BOP is easier and cheaper and it also provides these types of low-risk profile businesses with the coverage they need without making them purchase policies that aren’t necessary.
Conversely, if the business is a large manufacturing plant that needs a very comprehensive commercial property policy that includes pollution liability and product recall insurance, a CPP would enable them to bundle those policies for a better price without losing the flexibility they need to cover their unique exposures properly.
