Business Owners Policy Vs. Commercial Package Policy: Differences Explained

December 28, 2022 / By: Stampede Insurance Team
Business Owners Policy Vs. Commercial Package Policy: Differences Explained

By protecting your business from events and occurrences that are out of your control, you are able to secure what you've built, and this is possible through commercial package policies.

Ensuring the progress you've made can't be undone by one unlucky event, insurance validates your hard work and commitment to building your company.

Insurance for businesses is complex. Insurers often feel overwhelmed by the number of risks they must address and the number of policy options available. Companies have been offered policy bundles to help them deal with the confusion, including business owner's policy (BOP) and commercial package policy (CPP).

However, BOPs and CPPs are not the same things, despite their sounding similar.

What is Business Owners Policy?

Business owners policies are prepackaged policies that include business liability, property, and interruption coverage. Personal property belonging to a business is covered by a business owner's policy.

When disasters happen and financial obligations still need to be met, loss of income can result in damage to the building and assets inside.

The BOP was created by insurance companies for small businesses, so if your business is too big, it wouldn't be a good fit.

Moreover, the BOP is better suited to companies with less specialized risks than the CPP, since it covers fewer risks. It is sufficient to cover the insurance needs of many business owners with the BOP.

What Does BOP Cover?

Small businesses like contractors, retailers, wholesalers and distributors benefit most from preassembled, standard business owners policies. You can customize the policies by adding coverages that are right for you, even though they come pre-made.

Business Liability

A business owner, while using one of your products, or partaking in a service you provide, is covered by this coverage, up to the limit of their insurance coverage.

Commercial Property

Among the buildings covered by this policy are businesses, apartment buildings, commercial properties, etc. As well as the furniture and inventory in the building, it also includes equipment and/or machinery.

In some cases, this type of insurance does not automatically cover losses. Flood damage, for instance, is usually not covered.

Business Interruption

When a covered loss causes your business to close or relocate, business interruption insurance replaces the income you would have earned. A pandemic restriction has recently been placed on business interruption coverage, but this coverage remains essential.

How Does Commercial Package Policy Work?

Several commercial policies can be packaged into one commercial package policy by business owners. When compared to a business owners policy, the former may be a better option for companies with larger or growing operations or specialized risks.

Commercial property and liability coverage is typically included in CPPs to protect physical assets; however, any additional coverages will have to be added separately. The insurance partner you choose must have enough experience to help you identify all of the exposures and risks specific to your business.

What are the Benefits of CPP?

Business insurance programs built around a CPP are more flexible and offer more options. With a CPP, you can tailor your insurance bundle to better fit your business's risk profile and needs rather than the three coverages that are assigned to the policy.

An employer's liability policy can include a range of coverages, including errors and omissions, auto insurance, pollution liability, and employment practices liability. CPPs offer you the option to bundle the exact policies you require, saving you money over buying each policy separately.

What is the Difference Between BOP and CPP?

Contrary to what is often stated, a BOP and CPP are not the same. An important difference between business owners policies and commercial package policies is that a business owners policy is prepackaged.

They both feature comprehensive coverage while saving businesses money. One of the biggest differences between BOPs and CPPs is that they are insurance bundles bundled together to offer savings.

Both a BOP and a CPP will typically cover general liability and property. They will typically include similar coverages. Thus, both cover the same risks with respect to business liability and property. Business owners policies are prepackaged bundles, while commercial packages are not.

These kinds of policies are essential for everyone, regardless of their industry. Go with the BOP if you are looking to save money and are not concerned with extra coverage. The CPP might be the right choice for you if you want a more customizable option.

If you are not sure which policy would be most beneficial for your business, consult with an independent agent as soon as possible.

Find a Business Insurance Company You Can Trust

Regardless of the size of the business, insurance is essential. In addition to proving your seriousness and dedication to your craft, it's also beneficial for your reputation. In the event that an accident occurs, it also proves to your clients that you have insurance coverage.

Whether you are looking for a BOP or CPP package, we have experienced and dedicated brokers on hand to answer any questions you may have.To learn more about business owners policy vs. commercial package policy, we are here to help you. Give us a call at 888-306-7887 at Stampede Insurance Services today!

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