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Main Body

Commercial Package Policy (CPP)

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.


· 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.


Auto held for sale


Property that is airborne or waterborne

Electronic Data*

Valuable Paper and Records*


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


Non-owned Detached Trailer



ACV -Could endorse to RC

Small losses – (under $2,500) are settled on an RC basis




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


Glass breakage

Sprinkler leakage

Water damage


All other perils are covered, but payment is reduced by 15%




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:










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)




Windstorm and Hail

Riot or Civil Commotion


Volcanic Action

Vehicles and Aircraft


Sprinkler Leakage

Sinkhole Collapse


Broad (named peril)

Special (open peril)


Wear and Tear

Rust, Decay, Latent Defect


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.


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.




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