Commercial Package and Businessowners Policies
The BOP
The businessowners policy is a packaged, simplified policy for small, low-hazard risks: offices, retail, service businesses, small apartments, restaurants, and qualifying contractors and wholesalers under size thresholds (receipts, square footage, payroll). Auto dealers, banks, and larger or high-hazard operations are ineligible. The BOP bundles property (usually open perils on building and business personal property), business income for up to 12 months, and liability (A bodily injury/property damage, B personal and advertising injury, C medical expenses) with a single deductible and a short list of extensions. It is written at limits you select rather than through a property coinsurance clause, and can be endorsed.
The commercial package policy
The CPP is modular: choose two or more coverage parts - commercial property, general liability, crime, inland marine, equipment breakdown, commercial auto - and attach declarations, common conditions, and endorsements. Commercial property uses the building and personal property form with a coinsurance percentage (often 80%), causes of loss forms (basic, broad, special), and optional agreed value or blanket limits. Business income covers net income and continuing expenses during the period of restoration plus an extended period; extra expense covers the cost of avoiding shutdown.
Traps
Assuming business income equals lost sales (it covers lost profits and continuing expenses). Confusing the CGL aggregate with the per-occurrence limit, or products-completed operations with the general aggregate. Forgetting that equipment breakdown (boiler and machinery) is separate from property, and that employee dishonesty is crime coverage. Reporting forms require periodic value reports; blanket limits apply across locations.
Rule of thumb: small and packaged means BOP; customized or large means CPP.