Commercial Package Policy
Embroker’s Commercial Package Policy includes premium commercial property insurance, general liability insurance, and business interruption insurance. Get it in minutes, not days.
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 endorsements 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.
Who Is It For?
The biggest difference between a CPP and a BOP is the options and flexibility in terms of coverage that each provides. A BOP will usually be perfect for small businesses that don’t have a huge number of employees or a lot of property to worry about, especially if they are not working in an industry that is considered a high-risk one.
A business owners policy will provide a cost-effective option to provide these types of low-risk small businesses with the right amount of coverage in one convenient package that can be easily managed. The CPP, on the other hand, can be used to address more specific coverage needs.
A CPP is much more flexible and provides businesses with greater options in terms of making sure that they are able to protect against complex and specific risks while avoiding gaps in coverage. This means that while a CPP will usually always include general liability, commercial property, and business interruption insurance as the basis of the package, larger businesses that have more complex coverage needs can bundle policies such as umbrella, commercial auto, and equipment breakdown to secure an expanded range of coverage.
Both BOPs and CPPs serve the same essential purpose, allowing businesses to bundle related policies instead of buying each one separately, which allows them to save money on their coverage. Whether a BOP or CPP is the best option for you depends on your business risk profile.
Why Do You Need It?
Having the right commercial package policy provides your business with peace of mind, knowing that if your property was to be significantly damaged or a third-party was to injure themselves on your property and sue you for damages, you would have the financial support needed to survive such an ordeal.
Running a business in today’s highly unpredictable and litigious society can be an incredibly stressful endeavor if you are unprotected and are running your businesses with the knowledge that one freak accident and expensive lawsuit could put you out of business for good.
Even if your business is lucky and isn’t hit with a natural disaster that damages your property or a lawsuit by a customer that injured themselves 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 has insurance to protect itself from things that are outside of your control.
Commercial Package Policy vs. Business Owners Policy
It’s clear that the biggest thing that BOPs and CPPs have in common is the fact that they are insurance bundles. That means that they are made up of several policies and that it costs less to buy these policies as a bundle than it would be to buy each of them separately.
The biggest difference is that the insurance policies that come with a BOP are usually predefined. Insurance companies know that general liability, property, and business interruption are policies that a majority of small businesses need, no matter what industry they are in, which is why they decided to package them together as a BOP.
Naturally, you can customize your BOP a bit and add endorsements that could make the coverage more flexible, but the BOP can never be as flexible as a CPP.
Even though a CPP will usually include general liability and property coverage as well, since they are staple coverages for any business, the options you have for putting together a more diverse insurance plan are much greater when purchasing a CPP.
It’s important to remember that one is in no way better than the other. BOPs and CPPs serve different purposes and both serve their purposes equally well.
What Does It Cover?
As already mentioned, a CPP is similar to a BOP because it allows business owners to bundle various types of coverage and bind them as a single policy. The main difference between a CPP and BOP is that the CPP does not have as many limitations regarding the other coverages that you can bundle along with the typical coverage a BOP would provide.
As is the case with a BOP, a CPP typically begins with the following essential coverage:
Commercial Property Insurance: Covers damage to property, bot just buildings, but also inventory, equipment, signage, and more.
General Liability Insurance: Covers legal costs related to claims arising from third-party bodily injuries or property damage.
Business Interruption Insurance: Helps cover lost revenue, unpaid wages, rent, and a slew of other expenses if your business is damaged and needs to close down for a period of time in order to renovate or relocate.
Other coverages that are typically bundled within a CPP to provide more diverse and expansive coverage for businesses with more demanding coverage needs include the following:
Commercial Auto Insurance: Covers damages related to vehicles owned by your business or private vehicles used for business purposes.
Commercial Crime Insurance: Covers financial losses resulting from employee dishonesty, burglary, fraud, forgery, and other business crimes.
Commercial Umbrella Insurance: Broadens liability coverage when necessary in order to fill gaps that might arise within your coverage and provides coverage for liabilities that might not have been specifically covered by another designated policy.
Equipment Breakdown: Covers losses related to equipment breakdown including heating, electrical air condition, refrigeration, and other equipment failures.
Pollution Liability: Covers pollution-related costs such as personal injury and required clean-up procedures.
While these are some of the most popular coverages that are typically bundled, the CPP provides businesses with very diverse options when it comes to other types of coverage they may want to include in their CPP.
What’s Not Covered?
No matter how flexible CPPs are and how many types of coverage you are able to bundle into the package, there are some insurance policies that you simply cannot include in a CPP, including the following:
Directors & Officers Insurance: Provides liability cover for company management, protecting directors and officers and their personal assets from claims which may arise from decisions, mistakes, and “wrongful acts” they may have committed while acting on behalf of the company.
Key Person Insurance: A life insurance policy that a company purchases on a key executive or employee who is incredibly vital to the success of the company.
Workers Compensation: Covers damages related to employee injuries such as lost wages, medical bills, rehabilitation, and in the worst-case scenario, death benefits, and funeral expenses.
If your business needs these coverages as well, you will have to purchase them separately.
What Does It Cost?
One of the main characteristics of a CPP is that businesses are able to add numerous riders to the package in order to customize their coverage. Naturally, the more types of coverage you include in your CPP the more expensive it’s going to be.
But outside of how many extra coverages you are adding to your CPP and how complex your coverage is, there are several factors that insurers will look at in order to determine how much you are going to have to pay for your CPP, including:
If you work in a high-risk industry, you’re going to pay more for your CPP. Construction companies will pay significantly higher premiums than accountants, for example, because their liability and property risks are much greater.
Businesses located in large cities will usually pay more for a CPP than those located in rural areas. The more populated your location is, the more susceptible your property is to crime and vandalism, for example. Also, if you live in a part of the country that has 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
The size of your company usually determines whether or not you should get a BOP or CPP. The more employees you have, the greater chances are that a BOP will not give you proper protection. And if you’re a large company that has more than 100 employees and no longer qualifies for a BOP, the higher your employee count gets, the more you’ll pay for your CPP.
Value of Property
The greater the value of your property and the harder and more expensive it is to replace your physical property, equipment, and inventory, the higher your CPP premium will be.
If your business has a history of claims, especially severe claims that ended in significant payouts by your insurer, you will pay much more for your CPP than a company that has seen very few claims over the last several years.
Why Get It With Embroker?
Even purchasing complex policy bundles is easy with Embroker. Our state-of-the-art technology and expert brokers combine to make the experience fast and simple for you.
Our digital insurance experience cuts administrative costs out of the equation, which makes it easy for us to offer you the most competitive prices on the market.
Our brokers will help you customize your CPP to make sure that all of your exposures are covered and your business is fully protected.
We provide you with expert support no matter your question: Reach us 24/7 via phone, email or live chat. You even get a personal account manager to look after you and your insurance needs.
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