A commercial package policy (CPP) is a type of insurance policy that covers various dangers, such as liability and property risk. A commercial package policy enables a company to receive insurance coverage in a flexible manner. CPPs also offer the advantage of allowing you to pay cheaper rates than if you got a separate policy for each risk. A Business Owners Policy, or BOP, may provide the minimum property and liability coverage required by businesses without specific risks. However, if your company encounters particular risks due to the industry you work in, you should consider finding a Commercial Package Policy.
How Commercial Property Packages Work
Commercial package policies are often written by insurance companies for small to medium-sized organizations. These companies may have lower liability requirements since they do not operate huge facilities. Or they simply need supplemental insurance coverage for specific hazards. A modest manufacturing company or car wash operation, for example, is unlikely to require the same level of coverage as a real estate developer. Commercial package policies are very customizable and can bundle two or more coverages into a single policy. While each plan is unique, the average CPP will cover a variety of property and liability risks.
Commercial Property Packages vs Business Owner Policies
We know CPPs sound like BOPs, but they’re vastly different. The fact that BOPs and CPPs are insurance bundles is clearly the most important item they have in common. That is, they are made up of numerous policies. And purchasing them as a package is less expensive than purchasing each of them separately. The primary difference is that the insurance plans that come with a BOP are often predetermined and limited. Insurance companies recognize that general liability, property, and business interruption are policies that the majority of small businesses require, regardless of industry, which is why they opted to package them as a BOP.
Naturally, you can tailor your BOP and add endorsements to make the coverage more flexible. But it will never be as versatile as a CPP. Although a CPP will often contain general liability and property coverage, as these are essential coverages for any business. The options for putting together a more comprehensive insurance plan are far wider when acquiring a CPP. It is important to remember that one is not superior to the other. BOPs and CPPs provide distinct coverage, and both perform wonderfully.
Building a Commercial Property Package
As we said, CPPs are a bundle policy. While BOPs typically only bundle a few key policies CPPs will bundle as many as you need. A CPP starts the same way a BOP does with core coverages:
- Commercial property insurance – Covers damage to property, including not only buildings but also merchandise, equipment, signage, and other items.
- General liability insurance – Covers expenses if a customer gets hurt on your property or while using your product or service.
- Business interruption insurance – Covers lost revenue, unpaid salaries, and rent. Along with a variety of other costs if your business is destroyed and must close for a period of time to renovate or relocate.
After the basic core coverage is picked is where CPPs stand out from BOPs. Other coverages that are often packaged under a CPP in order to provide more broad and expansive coverage for companies with more demanding coverage needs include:
- Commercial auto insurance – Covers damage to vehicles owned by your company or private automobiles used for business.
- Commercial crime insurance – Financial losses caused by employee dishonesty, burglary, fraud, forgery, and other corporate crimes are covered.
- Umbrella insurance – When necessary, broadens liability coverage to bridge gaps in your coverage. And offers coverage for liabilities that may not have been specifically covered by another authorized policy.
- Equipment breakdown – Covers losses caused by equipment failure, such as heating, electrical air conditioning, refrigeration, and other equipment problems.
- Pollution liability – Covers pollution-related expenses like personal harm and necessary clean-up measures.
- Electronic data processing coverage – Covers the costs of electronic data processing media or equipment loss or damage.
- Employment practices liability – Covers costs associated with employee disputes involving termination, discrimination, sexual harassment, and other workplace issues.
A CPP can also contain insurance for professional liability, supply chain risk, terrorism, farming or ranching losses, and other risks.
What Isn’t Covered?
Regardless of how adaptable CPPs are and how many types of coverage can be bundled into the package. There are some insurance policies that simply cannot be included in a CPP. If you need any of these policies, you’ll have to purchase a separate policy:
- Directors & Officers insurance – Provides liability coverage for corporate management. Shielding directors and officers and their personal assets against claims arising from choices, errors, and “wrongful acts” made while working on behalf of the company.
- Key person insurance – A life insurance policy purchased by a corporation on a key executive or employee who is extremely important to the firm’s success.
- Workers’ compensation – Covers employee injuries-related damages. Including lost earnings, medical bills, rehabilitation, and, in the worst-case scenario, death benefits and burial expenditures.
Who Needs A Commercial Property Package?
A CPP is more comprehensive since it allows you to combine two or more liability policies. Giving you more coverage alternatives than a BOP. With a CPP, you can boost your coverage limits in places where you are more likely to face a claim. While decreasing your policy limits in locations where you are less likely to face a claim.
A commercial package coverage is frequently matched up with mid-sized companies and those with higher risks. A CPP is especially beneficial for small and medium-sized companies that want a customized approach to risk management. Since it gives coverage alternatives that go beyond a BOP and underwriting that is tailored to their individual needs.
The Cost of A Commercial Property Package
One of the key features of a CPP is that businesses can tailor their coverage by adding a variety of riders to the package. Naturally, the more types of coverage you include in your CPP, the higher the cost. Aside from how many supplementary coverages you add to your CPP and how complex your coverage is, insurers will consider various aspects to determine how much you will have to pay for your CPP, including:
If you work in a high-risk industry, your CPP will be higher. Construction companies, for example, will pay substantially higher premiums than accountants since their liability and property risks are much higher.
Businesses in large cities typically pay more for a CPP than those in rural areas, because the more populated your location is, the more vulnerable your property is to crime and vandalism.. Additionally, if you live in a region of the country with a history of natural disasters such as hurricanes and earthquakes, your CPP will cost significantly more than if you were located in a low-risk region of the country.
Number of Employees
Whether you should get a BOP or CPP is largely determined by the size of your company. The more employees you have, the more likely it is that a BOP will not provide adequate protection. Also, if you’re a company with more than 100 employees that no longer qualifies for a BOP, you may need a CPP if you want to bundle your policies. It’s important to note that the amount of employees you have will raise your CPP premiums.
The higher your CPP premium, the higher the value of your property and the more difficult and expensive it is to replace your physical property, equipment, and inventory.
If your company has a history of claims, particularly serious claims that resulted in big settlements from your insurer, you will pay much more for your CPP than a company that has had very few claims in recent years.
Why You Need It
Having the right commercial package policy gives your company peace of mind, knowing that if your property is significantly damaged or a third-party injures themselves on your property and sues you for damages, you will have the financial support you need to get through the ordeal. Running a business in today’s highly unpredictable and litigious environment can be a very stressful activity if you are unprotected and running your business with the knowledge that one unforeseen accident and costly lawsuit might put you out of business for forever.
Even if your business is fortunate enough to avoid a natural disaster that damages your property or a lawsuit from a customer who was injured on your property, having the right liability and property coverage allows you to confidently run your business and take calculated risks knowing that your business is protected from things beyond your control.
Help From EZ
EZ can assist you whether you are searching for commercial insurance to protect your business or group health insurance for your employees. Our agents work with the top insurance providers in the country to locate the best insurance for your company and its employees. In fact, by working with your budget to get you the greatest coverage, we can save you hundreds of dollars per year. If you have any questions, please contact us at 877-670-3531 for group health insurance assistance and 877-670-3538 for commercial insurance. Or put your zip code into the bar below to get your instant free quotes.