Do I Need a Business Owners Policy or Commercial Package Policy?

There are different commercial policies available for your business depending on several factors, such as your industry and the size of your business. It is important to evaluate your business’ risks and speak with an insurance agent about insuring your business with the proper policy.

The two main packages for businesses are a business owners policy (BOP) and a commercial package policy (CPP). Coverage between these two policies are similar, but there are also stark differences.

Mainly, a business owners policy is built for small businesses in low risk industries. Meanwhile, commercial package policies are geared for large businesses in high risk industries. This is reflected in how each policy operates.

A business owners policy covers:

·       Property Coverage: Property coverage provides compensation if the commercial building owned by the business is lost or damaged due to fire, lightning, smoke, theft, vandalism or other covered danger.

·       General Liability: General liability provides compensation if a third party is injured or has their property damaged due to every day operations by the business. It can also cover legal fees if the victim decides to sue.

You can add coverages to this policy as well to cover additional property and liability risks.

A commercial package policy covers both of these coverages but can be expanded. It’s more flexible and can often include:

·       Commercial Auto Insurance: Most states require businesses to carry commercial auto insurance. This insurance provides coverage similar to personal auto insurance such as comprehensive, collision, and uninsured/underinsured motorist.

·       Business Income Insurance: If an event makes it impossible to continue operating the business, business income insurance can provide compensation for the wages lost while the business is put on hold.

·       Equipment Breakdown: Some businesses require expensive equipment. Equipment insurance can help replace broken equipment. This is especially important for restaurants and other businesses that handle produce that need refrigerators and freezers.

·       Crime Insurance: Crime insurance protects your company from theft by employees or managers.

·       Inland Marine Insurance: Commercial auto insurance typically won’t cover items in transit. Inland marine insurance provides compensation if items or equipment are lost or damaged in transit.

On average, a small business is one that has less than 100 employees. Low-risk is considered industries that are not at high risk of a claim or lawsuit, such as online retail. A high risk industry would more closely refer to a law firm or medical institution. Speak with an insurance agent about what policy is best for your business.