Policies that cover property and building used for business. The package policy will combine two or more coverages into one policy.
A CPP can include:
Commercial property
Commercial inland marine
Commercial crime
Commercial general liability
Commercial auto
Equipment breakdown
Farm coverage
Ocean marine, workers’ compensation, umbrella, and aviation are not part of the CPP
Components of a Commercial Policy
A commercial package policy consists of
Common policy declarations
Common policy conditions
Two or more coverage parts = CPP
One coverage only = monoline policy
Business selects coverages needed or desired
Components of a Commercial Policy
-Common Policy Declarations includes the insured’s name, Address, Policy Period, Premium, and a description of the business.
-Common Policy Conditions (FIRST NAMED INSURED IS IMPORTANT)
· Cancellation can happen at any time but this can only be executed by the first named insured. You must give the company written notice.
· Changes can also happen at anytime and only by the first named insured. Endorsements are used to make these changes which are used if changing one policy in the CPP.
· Examination of Books and Records can be completed by the insurance company up to three years afterwards.
· Inspections and Surveys can be conducted by the insurance company and recommendations can be made to reduce risk. Surveys are used in order to determine rating classifications.
· The first named insured is responsible for paying the premium for the policy.
· The insurance company must approve a transfer of their rights from the first named insured to another individual or organization.
· If the insurance company nonrenews your policy, the must do it in writing prior to the expiration of the current policy.
· Interline Endorsements are used when you want to make changes on two or more of the policies included in the CPP.
Common Policy Declarations
A common first page of the insurance policy that will list insured name and address, the policy period, premium amount, and a list of coverages that apply. Also a description of the business.
Common Policy Conditions
Common conditions apply such as both parties have the right cancel the policy, changes, examination of books and records, transfer of rights and duties, premiums, and inspections and surveys.
Interline Endorsements
An endorsement that affects more than one portion of the CPP
Commercial Property
Commercial Property Conditions Form
In all commercial policies and establishes policy provisions for concealment, fraud, misrepresentation liberalization ,no benefit to Bailee, transfer of recovery rights, control of property, legal action against the insurer, policy period and coverage territory.
Coverage Forms
Used to cover a direct physical loss with commercial property and buildings
Building and Personal Property
Property that can be covered are building, the insured’s business personal property, and named property in the care, custody and control of the names insured.
Buildings: Covers completed additions and fixtures, as well as permanently attached machinery.
Business personal property: Includes business property of the insured within the building and within 100 feet of the dwelling. Can also include leased personal property that the insured has a contractual obligation.
Personal property of others: Property in the care, custody and control of the names insured.
Coverage to scheduled or blanket property with limits shown on the declarations page.
Building and other structures, including
Building additions, permanently installed fixtures, machinery and equipment, outdoor fixtures, and other personal property used to maintain the building. Furniture, stock, and other personal property
Building and Personal Property Form: Business Personal Property – Not Covered
Accounts, Bill, etc.
Animals
Auto held for sale
Contraband
Property that is airborne or waterborne
Electronic Data*
Valuable Paper and Records*
Automobiles
Outdoor Property*
And we don’t cover the land
Building and Personal Property Form: Additional Coverages
Debris Removal
Fire Department Service Charge
Preservation of Property
Increased Cost of Construction
Pollution Clean Up
Electronic Data
Building and Personal Property Form: Extensions of Coverage:
If the insurance amount purchased is equal to or higher than the coinsurance percentage of 80% or more as shown in the declarations
*Additional Coverages are automatic
* Extensions are earned
Building and Personal Property Form: Extensions of Coverage:
Newly acquired building or building under construction
$250,000 maximum each building
For 30 days
Business property at a newly acquired building
$100,000 maximum
30 days
Coverage Extensions
Personal Effects and Property of Others
Valuable Papers and Records
Property off Premises
Outdoor Property
FLARE
Non-owned Detached Trailer
Value
ACV -Could endorse to RC
Small losses – (under $2,500) are settled on an RC basis
Conditions
Appraisal
Recovered Property
Mortgage Holder
Duties in the event of a loss
Coverage Territory
US, its territories and possessions, Puerto Rico and Canada
Vacancy provision
If a building is vacant for more than 60 consecutive days, no coverage for
Vandalism
Glass breakage
Sprinkler leakage
Water damage
Theft
All other perils are covered, but payment is reduced by 15%
Coininsurance
Purpose:
Encourage insured to carry as close to full value of property as possible
Insured to value: Claims are paid in full up to policy limits
Underinsured: Partial claims are subject to a penalty
Standard coinsurance rule: 80% of replacement cost
Coinsurance formula
Step 1: Determine insurance required
Step 2: Do they carry at least this amount?
Step 3: If not, apply the following formula:
OR
Valuation
Agreed Value
Inflation Guard
Replacement Cost
Condominium Association
Because of the shared insured interest of the building, the association is listed as the named insured. This policy will typically cover exterior walls, plumbing, heating and air conditioning and roofs.
Insures condominium association against direct physical loss or damage to
Buildings and business personal property
Personal property of others in the care, custody, or control of the association while it is at the premises
Personal property owned by the association itself or that the unit owners have an indivisible ownership interest in
Applicable for either commercial or residential condominiums
Condominium Commercial Unit-Owners
This policy will insure the individual who own the unit. This policy will cover personal property, property in the care, custody and control of the insured, and the building from the paint in.
Builders Risk
Can be used to cover buildings under construction. Can be used to cover the general contractor or subcontractor, as well as the building owner. Typically insured at the full replacement cost of the anticipated finished product.
Provides coverage for theft of building materials and supplies.
Does NOT cover contractors tools and equipment.
Business Income and Extra Expense
Coverage is for actual loss
Suspension of operations
Direct loss
Damage to property at the insured location
Business Income will be for those businesses that will have to close
Extra Expense will be for those businesses that have to remain open
Legal Liability coverage form
Covers damage to property of others while in the insured’s care, custody, or control, but only if insured is legally liable for the damage
Covers specific cause of loss risks the insured becomes legally obligated to pay because of direct physical loss or damage to covered property, including loss of use
Causes of Loss Forms
The perils that are covered on each form
Basic (named peril)
Fire
Lightning
Explosion
Windstorm and Hail
Riot or Civil Commotion
Vandalism
Volcanic Action
Vehicles and Aircraft
Smoke
Sprinkler Leakage
Sinkhole Collapse
THEFT NOT COVERED
Broad (named peril)
Special (open peril)
Exclusions:
Wear and Tear
Rust, Decay, Latent Defect
Smog
Settling, Cracking, Shrinking or Expansion
Insects, Birds, Rodents or other Animals
Dryness or Dampness
Changes or extremes in temperature
Dishonest or criminal acts committed by You or Your Employees
Voluntary Parting
Rain, Snow, or Ice damage to outdoor property
Concurrent causation exclusions
Theft of Building Materials
Inventory Shortages
- Offers $5,000 for property in transit
Selected Endorsements
Ordinance or Law
Coverage for loss caused by enforcement of ordinances or laws regulating construction and repair of damaged buildings. Older structures that are damaged may need upgraded electrical; heating, ventilating, and air-conditioning (HVAC); and plumbing units based on city codes.
Spoilage
Coverage the reimburses business owners when perishable goods are lost or contaminated
Peak Season Limit of Insurance
Coverage for businesses that have peak times of year when there is a higher demand for their product
Value reporting form
Provides the information necessary for a variable coverage amounts needed by a business that holds irregular inventories throughout the year. The irregular inventory may be differences in the quantity, quality, specific items held.
