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Small businesses are typically categorized as businesses that employ less than 500 workers. According to recent data from the U.S. Small Business Administration there are approximately 28.8 million of these businesses in the United States. The small business community is a large and diverse community, covering a wide range of industries including retail, construction, healthcare, finance, manufacturing, information technologies, real estate, education and more; and accounting for 99.7% of all businesses in the entire country. Each small business is unique, so a one-size-fits-all commercial insurance policy is not always the best option for proper insurance coverage.
A Commercial Package Policy (CPP) is a customizable insurance package, composed of two or more business insurance coverage options from a single insurance provider, bundled together in one package. A CPP combines two or more coverage types, typically liability and property risks, but other types or coverage can be included as well. While a CPP is similar to a Business Owners Policy (BOP), there are some distinct differences. For one, BOPs are only available for certain types of small businesses, while CPPs can cover almost any industry or business size. Additionally, BOPs are limited in the types of risks they can cover, why CPPs only have a few exclusions and allow a wider range of coverages and limits.
Because Commercial Package Policies offer such broad and customizable coverage, they are an ideal option for small business clients. Obtaining commercial lines insurance coverage through a CPP allows a business to take a more flexible approach to their insurance coverage, and often results in lower premium amounts than if coverage was purchased via a separate policy for each risk.
Commercial Package Policy Coverage Types
Commercial Package Policies typically start out with a bundle of two coverage types:
- Property insurance, which covers damage or destruction to buildings, equipment, inventory and other commercial property.
- General liability insurance, which covers the costs of third-party injuries or damages from being on the commercial property or utilizing the business’s products or services.
Once the base package is formed, more coverage types can be added on, including:
- Business income insurance, which replaces lost revenue and covers certain expenses in the event that the business has to shut down or relocate temporarily due to covered losses.
- Business crime insurance, which covers losses of cash, assets, merchandise or other property as a result of fraud, embezzlement, forgery, misrepresentation, robbery, theft or other type of business-related crime.
- Equipment breakdown insurance, which covers losses resulting from the malfunction of heating, electrical, air conditioning, refrigeration and other commercial equipment.
- Employment practices liability, which covers costs tied to disputes between an employer and their employees over termination, discrimination, sexual harassment and other employment issues.
- Electronic data processing coverage, which covers costs associated with the loss or damage of electronic data processing media or equipment.
- Inland marine, which covers the transport of goods or assets that are moveable or mobile in nature, while in transit or in storage.
- Commercial umbrella liability, which increases policy limits and broadens liability coverage.
- And more!
Commercial Package Policy Exclusions
While a CPP overs a broad range of coverage options, there are some exclusions. CPPs do not include:
- Health insurance
- Life insurance
- Disability insurance
- Workers compensation insurance
These coverage types cannot be bundled into a CPP, but can instead be purchased separately by the business owner.
About Mavon Insurance
At Mavon Insurance, we pride ourselves on our unique approach to insurance. We focus on integrity, communication, professionalism, respect and gratitude to help our clients succeed and place business in specialized markets. For more information about our products or to become an agent, please contact us today at (855) 248-1480.