Businesses require insurance, but determining whether business owners policy or commercial package policy is appropriate for your business can be difficult.
You cannot prevent damaging events from occurring, but insurance helps you protect what you have built. Having insurance protects your business from big losses, ensuring that the hard work you and your employees invested in building your business is not wasted.
Business insurance purchasing may be a difficult decision to make. When it comes to insurance coverage, most businesses are divided into two groups; core coverage, which covers the vast majority of business elements, and specialized coverage, which covers specific aspects of the business.
We’re going to focus on the crucial, must-have policies in the first category today.
A Business Owners Policy differs from a Commercial Package Policy.
It’s a smart idea since insurance providers are in concurrence about what the most basic policies are that every business should have, to create policy bundles so that they may sell these fundamental products quickly and easily to businesses that require them.
Business owners’ policies and commercial package policies are bundled insurance policies that are sold for less than if each policy were purchased separately.
Which one of these bundles makes the most sense for your business, business owners policy vs. commercial package policy?
What is Business Owners Insurance?
A BOP is an insurance policy that bundles three vital commercial insurance coverages: general liability, property, and business interruption insurance.
Your general liability policy will cover medical costs and legal expenses if someone is injured at your workplace or while using your products or receiving your services.
Property insurance covers your business and all of its contents from common dangers such as vandalism, electrical fires, and plumbing. If your company is based in an area where earthquakes and hurricanes are common, you might be able to obtain coverage for these less common risks as well. The more extensive your protection, the more it will cost you. Property damage resulting from covered events and hazards will be compensated by the insurance company.
Business interruption insurance will provide you with the financial support you need to keep your business alive if you have to shut down due to a covered loss, such as serious fire damage. Lost wages, loans, rent, and other critical expenses will be compensated up to a time specified in your policy.
Small businesses whose products and services don’t carry a great deal of risk can benefit from purchasing a BOP. A BOP provides a solid insurance foundation for those businesses.
Buying insurance is all about finding the right balance between coverage and price, and the same is true for buying BOP coverage. The cut-off point for qualifying for a BOP is usually about 25,000 square feet, but every insurer has different criteria, so be sure to check.
A BOP cannot protect against every business hazard, but it provides a good foundation for smaller companies. The good news is that if you need additional coverage, such as crime or cyber liability insurance, it is fairly simple to add addendums to your BOP.
What Is the Meaning of Commercial Package Policy?
Larger businesses with more difficult risk profiles may not qualify for a BOP, even though it might be a fantastic method of putting together a strong insurance foundation. You may want to consider a CPP if your company has grown significantly and taken on more unique liability exposures as a result.
You can build your insurance package from scratch with a CPP to better suit your firm’s risks and demands. With a BOP, you get the three coverages that are assigned to the policy, but with a CPP, you can design your insurance package from scratch to better suit your business’s demands and risks.
You can bundle any combination of insurance policies when purchasing a CPP, including employment practice liability, pollution liability, and other mistakes and omissions coverage, among others. By bundling the specific policies you require, you can pay less for them than if you bought each one individually.
CPPs are not the only type of insurance policy available; directors & officers, workers’ compensation, and key person insurance, for example, are not eligible to be included in a CPP. These policies have to be bought separately.
What are the similarities between a business owner policy and a commercial package policy and how are they different?
BOPs and CPPs are insurance bundles that save businesses money while providing comprehensive coverage. They share the most obvious characteristic, which is that they are bundles.
On the other hand, standard BOPs and CPPs usually include general liability and property coverage and the coverage itself is usually similar, meaning that both a BOP and a CPP should protect against similar business liability risks and property perils.
Business owners policies are pre-packaged bundles, whereas commercial package policies are not. With a BOP, you know what coverages you’re getting. However, with a CPP, you may select and combine coverages to create the policy that you desire, even though general liability and property coverage are usually included. Businesses that purchase CPPs can tailor their insurance package to their specific insurance needs, beyond those two primary coverages.
Large businesses with more complex risks can benefit from the CPP’s flexibility, making it a better solution than BOPs for small businesses, which do not have the same level of flexibility.
Which business insurance package is right for your business?
Do you already have a good idea and understanding of business owners’ policy vs. commercial package policy bundles being the best option for your business? After reading this post, you will.
The BOP can probably provide you with the coverage you need if you are a new company starting out and just beginning to assess your risk profile.
Your company may already know what insurance coverage it needs if it has been growing successfully for years and already has enough protection.
Your insurance broker and their underwriting guidelines play a large role in determining whether a business owner’s policy or a commercial package policy is the best choice for you. Your budget and your insurer’s risk appetite are also important considerations. The most effective way to ensure that your business obtains the proper insurance plan is by talking extensively and openly with your broker.
If you want to buy a BOP or CPP but aren’t sure which one is best for you, don’t hesitate to contact us.
We offer claim representation services on a contingency basis, if we do not collect any funds for you, we do not get paid at all. Community Public Adjusters have expert knowledge of how the insurance claim process works. We work with you on every step of the claims process.
We represent home and business owners and have vast experience with the following types of claims
- Fire and smoke damage claims
- Water damage claims
- Flood damage claims
- Theft and vandalism damage claims
- Snow and ice damage claims
- Building collapse claims
- Wind and hail damage claims
- Catastrophic damage claims
- Roof leaks
- Blown off shingles & siding
- All plumbing leaks
- Toilet overflow
- Burst Pipes
- Frozen Pipes