Commercial Package Policy
Structure
The Commercial Package Policy is a packaging mechanism rather than a single coverage. Common policy declarations and common conditions sit on top, and the package must include at least two coverage parts: commercial property, commercial general liability, commercial auto, commercial crime, inland marine, or equipment breakdown. Each coverage part brings its own declarations, insuring agreement, exclusions and limits.
Commercial property highlights
Building and business personal property, business income and extra expense, blanket versus specific insurance, coinsurance, and the basic, broad and special causes-of-loss forms. Under the special form the insurer must prove an exclusion applies rather than the insured proving a peril is listed.
CGL highlights
Coverage A bodily injury and property damage; Coverage B personal and advertising injury; Coverage C medical payments. Know the occurrence versus claims-made trigger, the general aggregate, the products-completed operations aggregate, the each-occurrence limit, damage to premises rented to you, and the medical expense limit. Key exclusions include expected or intended injury, contractual liability, your work, your product, impaired property and pollution.
Traps
A CPP needs two or more lines - commercial property alone is not a package. Defense costs under the CGL are paid inside the limits, unlike the PAP where defense is supplementary. Do not confuse the general aggregate with the per-occurrence limit, and remember the products-completed operations aggregate is separate.
Rule of thumb
A small, low-hazard business needing simple property and liability in one contract points to a Businessowners Policy; a larger or multi-line risk needing auto, crime or inland marine points to a CPP.