Commercial Package Policy (CPP) For Business

The Commercial Package Policy of Insurance (CPP) is ultimately the most flexible commercial insurance program we have for businesses.  Almost every type of coverage can be packaged and included.  The commercial package policy offers flexibility and the ability to stretch to accommodate businesses of almost every type and size when we add two or more coverage forms.

Typical general classes of business include:

• Apartments
• Condominium Associations
• Contractors and Tradesman
• Industrial
• Processing
• Institutional
• Governmental
• Mercantile With and Without Cooking
• Hotel & Motel
• Office
• Services With and Without Cooking

The list of eligible businesses reaches into the hundreds of different classes that can be accommodated on the Commercial Package Policy.  Where a business owner policy might be good for one or a few locations, a Commercial Package policy can accommodate dozens if necessary.  Where a BOP automatically includes General Liability, Property and Loss of Income coverage, the Commercial Package Policy is flexible enough to provide only the coverage requested by the customer.  The CPP is ideal for large values, large number of locations, or complicated operations where more than one or two classifications are indicated by the work you do, and these are the places the BOP policy are not ideal.

Consider the CPP policy as a framework onto which many different coverage options may be bolted on to create the coverage that fits your needs and wants in the best way.  What sets the Commercial Package Policy into a class of its own is that is highly adaptable and modular in construction.  Every conceivable insurance coverage option, including the variability within the coverage options available, can be bolted onto the CPP package.  Some types of coverage are good candidates for separate policies like commercial auto, umbrella, and professional liability, but there are carriers out in the insurance world that are willing to pull them into the commercial package policy.

There are literally dozens of different types of coverage and endorsements that can be combined into the commercial package and the following are the highlights of the general categories of coverage available.  Only after a thorough conversation about your business would we be able to determine just how to package a protection plan for a business, especially when the business becomes large and complex.  The following are the general categories of coverage available under the CPP coverage form:

Typical Liability in the Commercial Package

• Bodily Injury and Property Damage, Premises Liability
• Personal Injury and Advertising Liability Coverage
• Employment Practices Liability Insurance
• Cyber Liability
• Fellow Employee Coverage
• Host Liquor Liability
• Liquor and Dram Shop Liability
• Non-owned Watercraft
• Owned Watercraft
• Hired and Non-Owned Auto Liability
• Products and Completed Operations Liability
• Employee Benefits Liability
• Employment Practices Liability
• Ohio Stop Gap Liability Insurance
• Professional Liability
• Errors and Omissions

Regardless of business type, liability insurance protects against the tort of negligence that arise from business operations.  The tort of negligence is a breach of duty that is derived from common law principles that have evolved through decades and even centuries of recorded decisions about our relationships with one another.  A duty is an obligation we owe to someone else.  In essence, we owe each other the duty to protect them from the consequences of our actions and when someone is hurt or suffers harm to either body, property, or reputation, in our culture we boil down our grievances to a monetary settlement in most cases.  In the case of the liability coverage provided in our commercial package insurance policy, we will pay for the benefit of a legal defense against the claims of injury or damage and we will also pay the amounts that become due to another because a finding of your negligence has occurred through legal proceedings or an agreement accomplished through the negotiations of your insurance carrier and the other people involved in the claim.  This includes bodily injury and property damage as a result of events on the premises, through acts on and away from the work facilities, injuries caused by products, advertising injury, personal injuries other than bodily injury, hired and non-owned auto liability, and injury or damage caused due to computer intrusion and compromise when chosen.

Common Limits of Liability include:

• $300,000/$600,000
• $500,000/$1,000,000
• $1,000,000/$2,000,000
• $2,000,000/$4,000,000

Sometimes the latter limits can be extended on the aggregate to three times the occurrence limit by endorsing the coverage and paying the additional premium.

It might also be important to note that liability may be imposed differently depending upon the triggers causing the loss.  For example, general liability is the standard of liability for every day operations and interactions.  In this view, Courts hold that each person owes a duty to act in a reasonable way so common standards of care and behavior are the guideposts in establishing negligence.  Products liability, on the other hand, pushes up the duty imposed on a business.  Courts hold product liability as strict liability.  Strict liability is the obligation to protect someone from injury or property from damage when a product is held to cause the injury or damage.  There is little defense against strict liability but products liability is considered to be an area where a business is held to a higher standard of care and duty.  There is also absolute liability.  In cases where activities and operations are so inherently dangerous, damage or injury is likely.  In this view, let’s consider the companies conducting certain types of operations – say blasting rock to create a roadway – and they cause damage to nearby homes that lose windows or cracks develop in the foundation of the home.  The company blasting is held responsible under notions of absolute responsibility.  There are also professional liability, employment practices, workers compensation, vicarious liability, and similar extension of responsibility that should be thoroughly evaluated for your operations.

Basic Forms of Liability Coverage Language

We have two kinds of basic coverage forms.  One is referred to as an “occurrence” form and the other as a “claims made” liability form of coverage.  Here is a quick explanation of each.

Occurrence form

Liability insurance based upon the occurrence form of coverage trigger is the dominate form of coverage issued for liability risks.  The coverage trigger is simple and familiar.  When a loss “occurs” during the period of coverage, and the loss is not otherwise excluded, it is covered, and the carrier defends the loss.  In other words, if the covered liability loss first occurs during the policy period, coverage applies.  The trigger is the occurrence and it must first occur during the policy period.

Claims Made Form

Claims made liability changes the rules.  In a claims made liability loss, when the loss occurs is a little bit less important.  The trigger is that, unless the loss is otherwise excluded, if the claims is first made during the policy period, it is covered.  That is to say, regardless of when the claim occurred, when the business becomes aware of the loss it must be first made during the term of coverage.  As simple as this sounds, underwriters control the “retroactive” date.  Claims first made must have occurred after the retroactive date but they may have occurred in prior policy years.  This helps carriers limit the length of time they are exposed to potential losses that have occurred but have not yet been made against coverage.  Fortunately, claims made policies and coverage are not common but frequently form the basis of coverage for professional liability and certain types of liability that may be present on your general liability, like employee benefits liability (as an example).  Companies also offer only a brief period after coverage ends for the discovery of unknown losses so claims made liability policies often provide an extended discovery period for an additional premium.

General Property Coverage in A CPP

Types of Property covered and optional causes of loss

• Buildings including multiple buildings, locations, multiple states
• Business Personal Property including fixtures and equipment
• Building Limit Automatic Increase (inflation roll-on adjustment)
• Valuable Papers and Records
• Accounts Receivable Coverage
• Computer Coverage and Cyber Crime
• Outdoor Signs—Attached and Detached
• Building Ordinance or Law Coverage
• Off-Premises Coverage for Business Personal Property, including Property in Transit
• Earthquake Coverage (Some carriers)
• Flood Coverage (Few carriers)
• Business Income, including Extra Expense Coverage
  • Several forms of business interruption
• Coverage For Water Back-up
• Equipment Breakdown
• Difference in Conditions

Unlike the BOP, property insurance is not required to be included except that a Commercial Package Policy is two or more coverage parts.  You can separate and separately place your property with difference carriers than the ones carrying the liability.  Business personal property includes stock and fixtures and processing equipment.  The package of coverage is easy to issue and maintain than a plethora of separate policy forms and coverage that are available.  The coverage form used for the commercial package policy includes a lot of coverage, sub limits, extensions, and we can’t get into these features in this place but the CPP is designed to easily deal with various locations and variety of situations for building, business personal property, computer and cybercrime needs, signs, coverage on or off premises, loss of business income, and break down of critical building mechanical systems that may alter your ability to operate.

Inland Marine and Special Property

(See IM Section for more Details)

Mobile equipment and property that leaves the building is best covered with an inland marine coverage endorsement that is designed for equipment that may float to where you actually do your work, like for example, heavy excavating equipment trucked to a construction site and which remains at this site for months.  Certain equipment that is mobile in nature and leaves the business premises will find the broad coverage of the inland marine policy endorsement is the best method of covering mobile equipment and property in transit.

Ocean Marine

Similar to the discussion of the Inland Marine in the latter, property that spends the greater part of its life on water or in water related service is usually found on an Ocean Marine endorsement.  These are often the types of coverage best separated from the commercial package because Ocean Marine is one of the most ancient forms of insurance and have unique and challenging differences of culture and language that most agencies never see in a career.

Umbrella Liability

Umbrella liability is an additional limit of liability coverage that protects for damages that exceed primary policies and sometimes losses that were not covered in the primary policies but were not excluded by the language of the umbrella policy.  Carriers writing the underlying BOP will often write umbrella liability for beauty salons and if they do they often include coverage over the professional liability.  You should ask and verify if this is the case.

Umbrella limits are often layered into “limits X of …” the first or underlying bands of coverage.  This layering enables an insurance company to accept the risk.  What they do is obtain both “treaty” and “facultative” sharing of the risk with other carriers to create the large limits some businesses may require.  Each band of coverage has, essentially, a big deductible.  The underlying bands are the deductibles, or, the point at which the coverage of this band becomes active and available for losses.

Crime and Fidelity

• Employee Theft
• Crime Inside
• Crime Outside
• Counterfeit Currency
• Exchange Risks
• Robbery
• Burglary
• Forgery, Alteration
• Dishonesty
• Computer Fraud
• Cyber Fraud and Loss
• Fund Transfer Fraud

The loss of money through theft, robbery or burglary, or the dishonesty of an employee are losses that can impair or cripple a business and tailoring your needs for crime and fidelity coverage can be done within the Commercial Package Policy to create the ideal protection.  The largest business tend to self-insure crime and take large deductibles to absorb the most common and frequent losses.

Business Auto

(See business Auto Section for Details)

When your business operates business vehicles it is important to insure the vehicles with liability protection just like the premises and operations.  The business auto coverage is dealt with in great detail in the business auto section.  Follow the link to this section for the specific business auto information.

There are three general categories of commercial auto risks:  Service, Retail, and Commercial.  There are hundreds of vehicle types, hundreds of categories of business using vehicles, and literally hundreds of thousands of miles of roads for vehicles to use.  Some trucks have welders, others have tow bodies, while others are pulling trailers packed with goods.  Some businesses require these vehicles to have certain filings with State and Federal transportation agencies.  Some vehicles are for hire, others not.  The Commercial vehicle coverage options and requirements are significant.

Professional Advice and Agency Service

A Licensed Ohio Agent Comes With Our Policies

Quality coverage begins with understanding your needs and the extent of your operation.  I have 37 years of experience working with business owners and have a genuine interest in working with business owners and their business insurance needs.  This agency represents quality carriers that we have the ability to provide the coverage your business needs whether or not it is ultimately provided the flexible Commercial Package Policy (CPP) options, our business owner form, or mono-line.  Call and ask for Terry McCarthy at (513) 779-7920, 9-5 Monday – Friday most days.  I schedule appointments at most other times of the day or week when needed. The agency is located at 8114 Paul Manors Dr., West Chester, OH 45069.