An essential reason that anyone should get commercial protection is that it is needed to protect your business. If you want to be a small business owner, you can quickly find that you need to make a significant investment to get the company off the ground. A great way to protect your investment is by obtaining commercial coverage. This support will help you offset any liability risk and directly protect any commercial assets you own.
You also need to get commercial coverage as it could be a requirement for you. Many businesses today are obligated to carry commercial coverage at all times. Suppose you have taken out a loan, raised equity, or even leased a business place. In that case, you likely will have signed documents that will require you to carry a certain level of commercial insurance and violating this could lead to a default.
A commercial package policy (CPP) is an insurance policy that combines coverage for multiple perils, such as liability and property risk. A commercial package policy allows a business to take a flexible approach to obtain coverage. The benefit of CPP is that it may allow the business to pay out a lower amount of premiums than if it purchased a separate policy for each risk.
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 allow for a high degree of customization and may combine two or more coverages into a single policy. While each plan is specific, the average CPP will cover different property and liability exposures. Coverage options include general liability and property coverage. Business auto policies are commonly added to the bundle, along with crime policies. Crime protection policies are insurance against more than just vandalism and include coverage for embezzlement, forgery, check, or money tampering and credit card fraud.
Commercial package policies can't include certain items like worker's compensation/employer's liability or directors and officers coverage. Workers' compensation insurance is required by law and must be purchased as a separate policy. Directors-and-officers policies are necessary for non-profit organizations. Group life and disability policies are also separate items with different policy choices and decisions.
A commercial package policy differs from a business owner's policy (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 consist of business income coverage regardless of whether the policyholder wants this. Commercial package policies only include coverages that are explicitly selected by the policyholder.
Before purchasing a commercial package policy, it is important that a business understands the risks that it faces. Rates are based on a combination of the type of business you are in, your expected annual gross sales and/or payroll.
