What is a Commercial Package Policy?
A commercial package policy (CPP) is essentially a business owners policy for larger businesses. It bundles two or more lines of insurance into one package that can be customized to suit the needs of any business. One advantage to packaging your policies is the organization. When multiple policies are purchased through various carriers at different times you often have staggered policy periods, payment schedules and conditions. With a CPP, all your policies are rolled together, as are their declarations, conditions and coverages.
CPPs generally afford great price discounts and more continuity within their coverage. Insurance companies are more willing to give premium credits and policy discounts when they write more lines of coverage for a business. A single business is unlikely to sustain simultaneous claims from more than one line of coverage, therefore, giving the insurance company more premium dollars to help offset claim costs. Another advantage to packaging your insurance in this manner is the ability to close potential gaps in coverage. Since a CPP is written by a single carrier, in one policy, it is easy to see where coverage ends and begins, allowing you and your agent to identify gaps easily. When reviewing multiple policies written by various carriers those gaps are harder to define, as policy language and standards vary between insurance companies.
While a commercial package policy can technically be written for any sized business, they typically work best for small or mid-sized businesses. Smaller businesses typically have fewer liability risks than larger companies, making it harder to purchase out of the box policies that have too much coverage. Most CPPs combine property and general liability; BOP, professional liability must be bought separately. Unlike a BOP, a CPP does not automatically include any standard coverages. A CPP is the most customizable option for business owners. Instead of paying for coverage you don’t need you simply build it from the bottom-up. Additional lines can be added to a commercial package policy as well, but coverages such as workers compensation and employee benefits must be written separately.