Commercial Package Policy vs. Business Owners Policy
Business Owners Policy
A Business Owners Policy (BOP) is a type of insurance that covers both your personal assets and the business itself. It’s often used by small businesses that don’t need to worry about insuring large-scale operations, but it can also be beneficial for individuals who run their own companies or have side hustles.
Commercial Package Policy
A Commercial Package Policy (CPP) is another type of coverage you can buy to protect yourself from financial loss due to theft or damage caused by natural disasters. This type of policy includes both property damage and liability coverage, so it’s important that you understand what each part means before deciding whether or not this type of plan is right for you and your business.
The Differences Between BOP and CPP
A Business Owners Policy (BOP) is a commercial package policy that covers a business owner, who may be an employee or an independent contractor, as well as the owner’s family members. The BOP is designed for small to mid-sized businesses that don’t have the resources or expertise to purchase individual coverage for all of their assets. BOPs are pre-packaged bundles of policies, where as you can choose which coverages you would like with CPPs (which generally include general liability and property coverage). Commercial Package Policy is generally designed for businesses with multiple locations and extensive property holdings. A CPP provides broad coverage across all locations under one umbrella policy at a lower cost than if each location had its own separate policy in place.
When to Use a BOP vs. CPP
If you’re a small business owner with a low-risk business, then a BOP is the right choice for you. You may also want to use this type of policy if your company has employees who work from home or in various locations. If your company has employees and meets the requirements above, but does not qualify for the commercial package policy due to its risk level (for example: high crime rate), then consider purchasing BOPs instead of CPPs. CPPs are generally a good fit for larger businesses who may not be able to meet all of their coverage needs through BOP bundles.
Deciding which option is best for your business also depends on your budget, your brokers underwriting guidelines, and of course what fits within your risk management assessments.
If you are looking into acquiring a BOP or CPP and aren’t sure which best fits you and your business, don’t hesitate to reach out to our dedicated team at any time.
