What is a Commercial Package Policy?
There isn’t much confusion when it comes to a commercial package policy, which bundles together two or more commercial coverage types into a single plan. While the coverage provided depends on the business and carrier, standard options include:
- Commercial Property – Protects your business’s physical assets, including buildings, property used in business, business income, and cargo.
- Commercial Auto or Fleet Vehicles – Similar to a personal lines auto policy, but is designed to cover vehicles primarily owned, hired, leased, or mainly used for business-related purposes.
- Commercial General Liability – Covers property damage, medical costs, advertising injury, court costs, judgments and settlements against your company, and administrative expenses caused by a business’s services, operations, or employees.
- Commercial Umbrella – Increases and broadens your business’s liability coverage.
- Boiler & Machinery/Equipment Breakdown – Helps repair or replace machinery or equipment damaged by a covered peril.
- Inland Marine (pending publishing) – Covers products and goods while shipped over land (e.g., truck, train).
- Business Crime – Covers losses caused by common business-related crimes like fraud (credit card or otherwise), embezzlement, theft, forgery, employee dishonesty, and check or money tampering.
- Business Income (pending publishing) – Reimburses business owners for their lost revenue and ongoing fixed expenses while the physical location is being restored.
- Electronic Data Processing – Covers costs caused by the loss or damage of electronic data processing media or equipment.
- Employment Practices Liability – Costs associated with the termination, discrimination, or sexual harassment of employees.
- Pollution Liability – If your business pollutes an area, this coverage includes related damages, including clean up and personal injury.
- Terrorism – Covers damaged or destroyed property caused by an act of terrorism.
- Farming & Ranching – Covers many exposures commonly faced by farmers, including livestock, grain, hay, crops, fruits and vegetables, orchards and vineyards, and even roadside stands.
Depending on your business’s unique risk exposures, you can add other policies for an additional expense.
Compared to purchasing a policy for each risk, a commercial package policy provides more flexibility to business owners while also offering most of the same coverages at lower premiums.
What’s the Difference Between a Business Owner Policy (BOP) and a Commercial Package Policy (CPP)?
Overall, you can customize a commercial package policy to fit your company’s needs, while you cannot do so with a business owner policy. Furthermore, BOPs often include standard coverages that you’re required to pay for but might not benefit you or your business.
For example, even if you don’t need business income insurance, this is something included—and that you’ll pay for—under a business owner policy. On the other hand, you can pick and choose only those coverages that apply to your circumstances under a commercial package policy.
Are There Exclusions Under a Commercial Package Policy?
Because commercial packages are a conglomeration of policies, they won’t expressly exclude coverages. Instead, each policy that makes up a CPP will provide its own list of exclusions in the paperwork.
With this said, commercial package policies cannot include coverage for workers’ compensation, which is required by law and must be purchased separately, nor directors and officers insurance, which is necessary for non-profit organizations. Life group life insurance also isn’t an option, which must be purchased separately, along with health and disability.
Related: Workers’ Compensation Insurance 101
If you require any of these coverages, be sure to consult with your IHS Insurance Group professional, who can walk you through the process of purchasing them separately.
How Much Does a Commercial Package Policy Cost?
Perhaps more than any other form of business insurance, what you pay for a commercial package policy is directly related to the underlying policies’ risks. Additional factors include the size of your business, its industry, and how many years you’ve been in business.
For example, suppose you own a company that distributes flammable gasses along the Gulf Coast who wants maximum coverage. In that case, you’ll likely pay more for your commercial package policy than a clothing retailer in the Pacific Northwest who only requires middle-of-the-road coverage.
With these details in mind, you might pay as little as $50 per month for a bare-bones commercial package policy, which can increase to well over $1,000 monthly for robust coverages and lofty limits for higher-risk exposures.
Should You Consider a Commercial Package Policy?
Commercial package policies are ideal for small-to-medium-sized businesses who don’t necessarily operate large facilities but who require additional insurance protection for their smaller exposures.
For example, a local realtor with a storefront on Main Street will likely present fewer liability exposures and require much lower coverage limits than a mega-manufacturing corporation with thousands of employees.
Consequently, the realtor will likely pay much less for their commercial package policy than the corporation, especially since insurance companies generally discount premiums when you bundle several coverages together. Furthermore, a CPP can provide the opportunity to streamline paperwork since everything’s contained under a single policy.
Where Can You Buy a Custom Commercial Package Policy?
When it comes to your business’s commercial package policy, it’s crucial that you carefully review coverage to ensure you’re adequately protected in the event of a loss. This is where the licensed professionals at IHS Insurance Group come in.
We can help review your business and insurance needs and recommend different carriers and their commercial package policies to meet them.
Do you need a FREE Quote or have questions regarding commercial insurance? Please fill out our quick GET A FREE QUOTE form, and an agent will get back to you at your convenience!
We look forward to speaking with you today!