A commercial package policy (CPP) is an insurance policy that bundles coverage for various risks and allows business owners to truly tailor their protection. CPPs often combine general liability with property coverage. Costs vary widely based on selected policies and coverage amounts, but getting CPPs usually saves business owners up to 10% on annual premiums.
A CPP program requires an insurance carrier who truly understands the nuanced risks of your business. Every business doesn’t need every coverage type maxed out. The experts at CoverWallet can take your business information through simple application to help you determine what coverage you really need. No obligation quotes are free.
What Is a Commercial Package Policy?
Much like a business owner’s policy (BOP), a commercial package policy (CPP) combines two or more common business insurance policies to help a small- to mid-sized businesses build affordable protection that eliminates gaps. However, CPPs allow business owners to bundle many policies while BOPs are prepackaged coverage that only include general liability, commercial property, and business interruption insurance.
What a Commercial Package Policy Covers
Business owners can typically select from a number of individual policies to put in their commercial package policies. Not only does this allow them to customize their insurance to their unique risks, but it often reduces the likelihood of coverage overlaps and gaps.
Some of the policies you can add to your CPP insurance plan include:
- General liability
- Commercial property
- Business interruption insurance
- Commercial umbrella
- Commercial auto or fleet
- Equipment breakdown
- Data processing loss
- Employment practices liability
- Inland marine
- Pollution liability
Which policies you need depends on your operations. A doggy day care requires different coverage than an HVAC installation company. Small business owners need to figure out which risks are most likely to hurt their business and select the policies that cover them.
What CPP Insurance Doesn’t Cover
Even though commercial package policies combine many different coverage types, there are some policies that insurance carriers don’t combine. This is sometimes the result industry or state requirements placed on these policies, but it can also be because the risks the policies cover make combining them economically unsound.
Commercial package policies generally do not include:
- Professional liability
- Workers’ compensation
- Health Insurance
- Disability insurance
- Directors and officers (D&O)
- Cyber liability
Providers may bundle professional liability, also called errors and omissions, with general liability when the risk is an innate part of the service provided and may not be easily discernible as a general liability or professional liability claim. Dance studio coverage is a good example of this.
Example of Commercial Package Policy Coverage
A home security company is one example of a business with a wide range of risks that require multiple policies. For instance, most security companies need general liability, commercial property, inland marine, commercial fleet, business crime, and business interruption. Additionally, the security company owner may need workers’ compensation plus errors and omissions to be fully covered.
The company owner can work with her agent to combine many of those policies into one CPP insurance plan. This can reduce costs and eliminate duplicate liability coverage that may appear in general liability, business crime, and commercial fleet. However, this business will most likely need standalone policies for workers’ compensation and errors and omissions.
Who a Commercial Package Policy Is Right For
CPP insurance is right for small- and mid-sized businesses that face fewer liability risks but that also need multiple insurance policies. Small business owners should also ask about commercial package policies if they’re interested in getting customized coverage while working with only one insurance provider.
If you are unsure as to whether a commercial package policy is right for your small business, ask your insurance agent to compare a CPP with other policies you are considering. Run the costs and evaluate the overall coverage to make sure you make the best business decision to protect against as many possible risks for the best price.
Commercial Package Policy Providers
Restaurants with high-risk exposure such as liquor liability
Legal or accounting firms with less risk away from the business hub
Online retailers and other professionals with a major online presence
Delivery companies and other businesses with vans and trucks
Manufacturers with risk exposures from production through supply chain
Buying a commercial package policy starts with finding a top small business insurance carrier that offers various types of insurance policies. When looking for a CPP, be sure to confirm you are not getting a business owner’s policy and that you can truly customize your policy options.
CoverWallet is a great choice for small business owners with complex risk like employee crime or liquor liability. As an online business insurance broker, CoverWallet workers with multiple insurers that can offer CPP insurance that includes general liability and business property and find the right insurance carrier to best cover the increased exposure.
Businesses where the majority of operations happen in an office such as accountants, lawyers, and marketing companies, should consider The Hartford. These businesses are typically eligible for a business owner’s policy with other insurers, but The Hartford is capable of building custom
Chubb has CPP insurance that includes a general liability portion designed to cover the increased risk for libel, intellectual property offenses, privacy invasions caused by the internet. Plus, the company offers international coverage in its commercial package policy and can write cyber liability insurance for small businesses. Any business with a strong online presence, especially through social media, should get a quote from Chubb.
Liberty Mutual is the right choice for business owners who have one or more vehicles needed to perform business operations. Whether this is a florist’s delivery vehicle or a contractor’s work van, Liberty Mutual is able to competitively price both commercial auto and inland marine coverage in its commercial package policies.
Brunswick Companies is the right choice for manufacturers who have risks starting with production and going all the way through the supply chain through distribution. Licensed in all 50 states, the company can offer manufacturers CPP insurance with many of the policies they need such as general liability, equipment breakdown, business property, inland marine, and business income insurance.
Commercial Package Policy Costs
Commercial package policy costs vary greatly depending on your industry and revenues as well as the combination of policy types you require. However, by combining policies into a commercial package policy, it is possible to save up to 10% on the overall insurance costs.
The factors affecting the price of your CPP include:
- Policies included: A commercial package policy that combines general liability, property, and crime typically costs less than one that also includes fleet coverage
- Company revenue: Insurance carriers assume that businesses with higher revenue face greater risk because that represents the amount of consumer interactions they have and the possibility for lawsuits
- Property value: High-valued items are more expensive to insure than less valuable property
- Coverage limits: As with all policies, increasing coverage limits increases premiums
- Deductible: Choosing a higher deductible reduces the insurance carrier’s potential cost in a claim so high-deductible policies are less expensive; however, this option means you need to have more cash available if you have to file a claim
While you may be able to save by choosing a commercial package policy, that’s not automatically true. You still need to compare options from multiple carriers, looking at both their CPPs and single policy offers.
Commercial Package Policy vs Business Owner’s Policy
Both a commercial package policy and a business owner’s policy give small business owners an easy way to protect their business from loss in one policy. The primary differences between CPPs and BOPs are the cost and flexibility of coverage. While BOPs tend to cost less, they are prepackaged policies with comparatively limited coverage. CPPs may be more expensive, but they allow business owners to truly tailor their insurance policies to their specific operations.
Pros and Cons of CPP Insurance
A commercial package plan is a great way to combine all your essential coverage into one policy, but it can be confusing for small business owners. Before purchasing a CPP insurance plan, be sure to consider the pros and cons.
Pros of a Commercial Package Policy
The advantages of having CPP insurance for small business owners include:
- Convenience: Small business owners like having one policy that covers as many risks as possible. This gives them one insurer to deal with for servicing and claims
- Cost savings: Underwriting and administration are done once, which saves insurance companies money. They can then transfer those savings by way of lower premiums to their policyholders
- Tailored coverage: Compared to a BOP, commercial packages policies offer business owners more flexibility and a wider range of coverage
- Reduced risk gaps: Policies held with the same insurance company, each underwritten for specific risks, helps ensure there are no unnecessary exclusions or coverage gaps
Cons of Commercial Package Policy
The disadvantages of having a CPP for small business owners include:
- Complexity: While most CPPs have general liability and commercial property, they are really built from the ground up, so they are more work to put together than BOPs
- Cost: CPPs can be less expensive than buying standalone policies, but they aren’t always; moreover, they are typically more expensive than BOPs because they offer broader coverage
- Rarity: Commercial insurance carriers that focus on small businesses are more likely to offer prepackaged BOPs because of its simplicity; this can make it more difficult to find a CPP unless you know what to ask for
- Risk of unnecessary coverage: Small business owners may be tempted to add coverage for risks they really aren’t exposed to; this makes working with an agent an essential part of getting CPP insurance
Tips For Getting a Commercial Package Policy
Every insurance agent will tell you that there are no two companies alike and that means you always need to evaluate the specific needs of your business. When putting together a commercial package policy, take the time to consider your risks and budget, and take a hard look at any potential gaps in coverage.
Here are three tips when getting a CPP insurance policy combination:
1. Review All Insurance Risk Needs
CPP insurance is designed to build a comprehensive insurance package. Make sure you think about all the concerns you have as a business owner from theft and fire to employee dishonesty and frivolous lawsuits. Talk to your insurance agent regarding where the biggest exposure is and how to protect against it with the right combination of policies.
2. Compare CPPs to BOPs
BOPs are prepackaged policies that only include general liability, business property, and business interruption. Many small business owners really only need a business owner’s policy, which is often the most competitively priced package. If you need more coverage then you want to compare the cost of a BOP plus the additional policies to the premium of a CPP with the same policies included.
3. Ask About Insurance Coverage Gaps
Knowing what isn’t covered is as important as knowing what is covered. Ask your insurance agent about any potential gaps with certain policies and how the various policies in your CPP insurance plan work together. Most small business owners need to balance total insurance costs with coverage gaps, so knowing what risk you are assuming and the potential cost is imperative.
CPP Insurance Frequently Asked Questions (FAQs)
Choosing between a commercial package policy and a BOP can be confusing, but it’s important to get it right. If you don’t get the coverage you need, you may find yourself paying for claims you thought were covered by your CPP insurance.
Do I need a CPP if I have a BOP?
A business owner’s policy covers most basic small business insurance needs by offering general liability, property, and business interruption. For a business that has more complex requirements, a commercial package policy may be appropriate because it provides more comprehensive coverage at an affordable price by combining several policies.
What is an interline endorsement?
In commercial policies, an interline endorsement is a clause in the contract that applies across several policies. They typically refer to general policy provisions such as effective dates, cancellation terms, and nonrenewal notices, and eliminate duplicate language.
What is a monoline insurance policy?
A monoline insurance policy covers only one type of risk such as a customer’s injury. These single coverage options may be combined into packaged policies such as a business owners’ policy, which packages general liability and property, or a commercial package policy, which typically bundles general liability and property with other monoline policies.
Small business owners need to maximize insurance coverage while keeping costs to a minimum. Commercial package policies does just this by allowing a business to get many insurance policy types combined into one comprehensive package. Because a CPP is completely customizable, business owners often get the coverage they need for the best price on the market.
Navigating exactly what you need for insurance coverage is best done with the help of a trusted expert. CoverWallet helps small business owners determine what types and how much insurance they need through one simple application. Get a free, no-obligation quote today.