Commercial Package Policy

A Commercial Package Policy ("CPP") is a customized package of two or more coverage forms. The package policy is comprised of the same coverage forms that are used when separate (monoline) policies are written. A premium discount is generally granted when separate coverage parts are purchased as part of a Commercial Package policy. The most common coverage forms include commercial property, commercial general liability, inland marine, crime, equipment breakdown, and commercial auto. 

A CPP differs from a Business Owners' Policy (BOP). A BOP is also a "package" of coverages, but a BOP automatically includes various standard coverages, such as general liability, property, business income, money and securities, valuable papers, accounts receivable, and employee dishonesty. 

A Commercial Package policy provides only the coverages selected by the policyholder. A CPP can consist of only general liability and building and/or contents property coverage, or can also include several other coverage forms. 

All coverage forms on a Commercial Package policy must be selected and tailored to the particular risk. 

What's Covered?

A CPP covers various property and/or liability exposures, depending on which coverage forms are selected. 

The property form covers buildings, personal property, signs, property off premises, valuable papers, newly acquired properties, and personal property of others. Some of the coverages are subject to sublimits that can be increased for an additional premium. Property insurance can be bought on replacement cost or actual cash value basis. A coinsurance provision generally applies. 

There are separate coverage forms available for business income and extra expense, equipment breakdown, accounts receivable, crime, and others. 

Liability insurance covers the business if it is sued for something the business did or failed to do that caused injury or property damage to someone else. Liability insurance covers damages and settlements stemming from a lawsuit, up to the policy limits. Many liability policies also cover attorneys' fees and other costs associated with defending against a lawsuit. 

Specialized property, business income and liability coverage extension forms can be added to a CPP for certain types of businesses. 

What Isn't Covered?

Workers' Compensation is generally not included as a part of a Commercial Package Policy. Health, life and disability insurance are written separately. Specialized coverages such as Directors' and Officers' Liability and Fiduciary Liability are written independently from a CPP. 

What Affects the Cost of the Policy?

The premium is based on a variety of factors, depending on the types of coverage forms included in the package. For property insurance, the age, construction, and value of the building will greatly impact the premium. For liability coverage, the inherent risk of the insured’s operations and products will affect the premium.