WEDNESDAY, OCTOBER 28, 2020
In insurance, a package policy refers to an insurance plan that combines coverages into a single package. There are two main types of insurance packages: a business owners policy and commercial package policy.
What is a Business Owners Policy?
A business owners policy is an insurance package geared for small businesses. It combines general liability insurance and commercial property insurance. General liability insurance covers bodily injury, property damage and personal and advertising injury claims against your business. Commercial property insurance covers your business’ physical assets in case of loss or damage caused by fire, wind, hail, lightning, smoke, theft, vandalism and more.
These policies are created for small, low-risk businesses. They combine coverages at a lower price and allow you to add coverages as needed. Insurance that is often added to a business owners policy includes:
Professional Liability: Professional liability insurance covers claims of professional negligence against your business. If a professional in your business causes a client to lose money, for example, professional liability insurance will step in to provide compensation and protect your business against a lawsuit. Many individual professionals choose to carry this insurance, as well.
Commercial Auto Insurance: Commercial auto insurance covers vehicles owned or used by a business for work purposes. These policies may include comprehensive coverage, collision coverage, liability, uninsured/underinsured motorist and more.
Cyber Liability: Cyber liability insurance covers accidents where electronically held information is damaged, breached or destroyed.
Umbrella Liability: Umbrella liability insurance fills in the gaps left by your other liability insurance policies. If one of your liability policies reaches its limit for a single claim, for example, umbrella liability insurance can step in to cover the remaining expenses.
Commercial Package Policy vs Business Owners Policy
The main difference between a commercial package policy (CPP) and a business owners policy (BOP) is who may qualify. A CPP is generally geared for larger businesses in high-risk industries. This means CPPs are generally more flexible and allow higher limits on coverages. A BOP covers small businesses (usually less than 100 employees, though this can change per industry) in low-risk industries. A single business may not typically have both a CPP and a BOP.
Instead, you should speak with an insurance agent about what policy fits your business best depending on the size of your company, the industry and other factors. Choosing the right policy is crucial for protecting your business.
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