Today is the first part of a series reviewing various business insurance coverages. Insurance companies will handle the various coverages differently, but some generalities can be made. Many companies often use standardized forms provided by the Insurance Services Office, but certainly not all do. Today’s coverages we will review are the Commercial Package Policy and Business Owners Policy.
The Commercial Package Policy (CPP) in its simplest form is the combination of two business coverages – most commonly general liability and commercial property. The CPP can be written a la carte to include a variety of different coverages, but is almost always written with GL & property. General Liability protects business owners from a wide variety of legal exposures, such as a customer getting injured at their location, damages due to a product failure (although the actual product itself is typically NOT covered), or a wide variety of other lawsuits. Commercial Property protects business owners against a loss to their building, contents & furnishings, inventory, or other goods. The CPP can also include things like tool coverage, equipment breakdown, professional liability, auto, and crime – it can be built “from scratch” to meet your needs specifically, and is often used for larger or more complex businesses.
The Business Owners Policy (BOP) is a package that automatically includes a variety of coverages to provide a more efficient and competitive method of insuring a business. The package includes general liability, commercial property, business income protection, and often also includes a variety of coverage enhancements. Business Income coverage replaces lost income when business operations are interrupted due to a covered property loss. For example, if there is a fire at a retail store and they cannot operate for 3 months, the income lost for those 3 months is replaced by the insurance company.
The BOP is meant to streamline coverage for less complex businesses such as small retail operations or a medical or professional office (but the BOP does NOT offer malpractice coverage!). If a BOP is available, it is often going to be more competitively priced than it would be to try to piece together similar coverages via a CPP.
As I mentioned previously, each insurance company is going to handle coverages differently, and ultimately if you have questions you should call your agent! Thanks for tuning in!