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Commercial Package Policy (CPP)

An insurance policy that combines coverage for multiple perils, such as liability and property risk. A commercial package policy, or CPP, allows a business to take a flexible approach to obtaining insurance coverage, and may allow the business to pay out a lower amount of premiums than it would had it purchased a separate policy for each risk.

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Insurance companies typically write commercial package policies for small or mid-sized businesses. These types of businesses may have smaller liability needs because they do not operate large facilities, or because they only require additional insurance protection for small risks. For example, a light manufacturing company or car wash facility is less likely to require the same amount of coverage that a real estate developer requires.

Commercial package policies afford companies a high degree of customization, and may combine two or more coverages into a single policy. In addition to property and general liability, this type of

policy may also provide coverage for automobile, inland marine, crime, or other risks. The policy premium depends on the risks that are being covered, as well as the number of coverages that are being combined.

This type of policy differs from a business owner policy, or BOP. While a business owner policy also combines multiple coverages, it often includes a variety of standard coverages that may not be of interest to the policyholder. For example, the policy may include business income coverage regardless of whether the policyholder wants this. Commercial package policies only include coverages that are selected specifically by the policyholder.

Before purchasing a commercial package policy it is important that a business understands the risks that it faces. This type of policy only covers specific risks, so if the insured party does not include insurance against a particular event then it will find itself without coverage. This type of policy doesn’t cover workers’ compensation, life, health, or disability.

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