What Does a Commercial Package Policy (CPP) Offer Businesses?
CPPs are designed with medium to large businesses in mind and offer great flexibility and robust insurance protection. The average CPP offers fundamental commercial property and general liability protection. The customization possibilities are nearly limitless and include many of the options for coverage listed below:
- Business crime insurance
- Business income coverage
- Commercial auto insurance
- Commercial umbrella liability protection
- Electronic data processing protection
- Employment practices liability insurance
- Equipment breakdown insurance
- Inland marine protection
- Pollution liability
With all that in mind, there are still things the average CPP doesn’t cover. You’ll need to fill in the coverage gaps through individual policies.
Differences Between a BOP and CPP
The main differences between a BOP and CPP include the following:
1) Design
With a CPP, you combine multiple coverage parts, such as business interruption, property, crime, liability, umbrella, inland marine, and auto. You can choose which ones most suit your type of business.
With a BOP, you get preset coverages and can add on others if desired. However, you must have general liability and insure either business personal property or buildings (or both).
2) Eligibility
With a BOP, you have defined restrictions, whereas, with the underwriting for a CPP, it could encompass just about any risk you’re willing to write.
3) Property Coverage
There are a few CPP property categories: business personal property, buildings, and property of others. There are two with a BOP, which is folding others’ property into the business personal property restriction.
There are also some building inclusions. A CPP includes business personal property. In contrast, a BOP would consist of personal property a landlord furnished under the “buildings” category (i.e. apartment furniture).
Certain property is or isn’t excluded. BOPs don’t exclude things like below-ground structures, foundations, walks, roadways, and patios like CPPs exclude.
You have a choice of broad, basic, or special perils with a CPP. With a BOP, there are special-form perils.
BOP’s, for business interruption, will cover your actual loss of income sustained, along with any extra costs you incurred for a restoration period of no more than 12 months after you experience the property loss. CPPs require you to choose a proper coverage form with a wide range of choices.
For valuation, with a BOP, most property is insured on a replacement-cost basis if you have the property insured with a minimum of 80% of its value. With CPPs, you must select the replacement-cost option to avoid an actual-cash-value settlement, and you must choose a coinsurance percentage.
As for extensions and additions, you’re provided with more coverage extensions and additions with a BOP, but with a CPP, it’s created for covering the actual exposure.
