Commercial package policy
A commercial package policy, or CPP, combines two or more business coverages, commonly commercial property and commercial general liability, in one policy. It gives the business coordinated declarations and conditions while keeping separate limits, deductibles, exclusions and endorsements for each coverage part. The issued policy determines what losses are covered.
Also called: commercial lines, commercial insurance, business insurance, small business insurance, commercial multiple peril policy
A commercial package policy is one business policy with several coverage parts inside it. The parts share a declarations page and common conditions, and each part keeps its own limit, deductible, exclusions, and endorsements. The word "package" does not show that a specific coverage is included, so the declarations page is where you confirm which parts you bought.
How a commercial package policy works, with a property loss example
The NAIC (opens in a new tab) says a typical CPP contains a common declarations page, common policy conditions, and two or more coverage parts. The Connecticut Insurance Department (opens in a new tab) describes it as a commercial policy that can be designed for a business's specific needs, with property and liability forms combined into a single policy.
Here is an illustration of the property part. The policy carries a $500,000 commercial property limit and a $2,500 property deductible, and the business has a covered building loss of $100,000.
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| Item | Amount |
|---|---|
| Covered building loss | $100,000 |
| Property deductible you pay | $2,500 |
| Insurer pays ($100,000 minus $2,500) | $97,500 |
| Left uninsured | $0 |
The $0 left assumes the loss is fully covered, the limit is adequate, and no coinsurance penalty or other condition applies. Placing property and liability in one policy does not make every loss payable. The property limit, deductible, covered cause of loss, exclusions, valuation provision, coinsurance clause, and endorsements all set the payment, and the liability part has its own limits and deductibles.
Coverage parts and choices that change the policy
A CPP can vary by coverage part, limit, deductible, cause-of-loss form, and endorsement. The California Department of Insurance (opens in a new tab) notes that a business can buy commercial property separately or as part of a CPP. Common parts include:
- Commercial property, covering buildings, business personal property, and property of others. Underinsurance can trigger a coinsurance penalty.
- Commercial general liability, with limits chosen for bodily injury, property damage, personal and advertising injury, medical payments, and the aggregate.
- Business income, which may cover lost income and continuing expenses after covered property damage, subject to the limit, the period of restoration, and a waiting period.
- Inland marine, which may cover property in transit or away from the described premises.
- Crime, which may cover specified employee dishonesty, money, or securities, subject to the limit and conditions.
- Commercial auto, where the insurer permits it. Connecticut lists a $750,000 minimum for freight vehicles of 10,001 pounds or more with no hazardous-material classification, according to the Connecticut DMV (opens in a new tab).
Causes of loss matter on the property part. Specified-perils coverage lists the covered causes, while open-perils coverage covers direct physical loss subject to exclusions. Our general liability vs professional liability guide compares two liability coverages.
Where you meet the term
CPP is a business term, and it is not ordinarily the name of an auto, home, condo, renters, life, health, or pet policy. You may see it on a quote, proposal, binder, declarations page, renewal notice, coverage-part schedule, or claim letter. The declarations page identifies the selected coverage parts, limits, deductibles, and premiums. Exclusions and conditions restrict coverage, and endorsements amend the base forms.
A claim letter may name the coverage part that applies instead of repeating the phrase "commercial package policy." Our Connecticut small business insurance guide covers the coverages a Connecticut business commonly discusses with an agent.
What Connecticut and New York change
Neither state sets one mandatory CPP coverage menu, but both regulate cancellation and renewal of commercial policies.
In Connecticut, Conn. Gen. Stat. § 38a-323 (opens in a new tab) addresses notice of nonrenewal, conditional renewal, and premium billing for personal and commercial risk policies. Conn. Gen. Stat. § 38a-324 (opens in a new tab) generally restricts cancellation of a commercial risk policy once it has been in effect more than 60 days, or after the effective date of a renewal, unless a listed ground applies. The grounds include nonpayment, fraud or material misrepresentation, and increased hazard, and the statute requires written notice.
In New York, Insurance Law § 3426 (opens in a new tab) applies to most commercial-lines property and casualty policies, including a CPP, according to DFS (opens in a new tab). During the first 60 days, cancellation generally requires at least 20 days' written notice, subject to exceptions. After 60 days, or for a renewal from its effective date, cancellation generally requires at least 15 days' written notice and one of the listed statutory grounds.
Questions to ask an agent or insurer
- Which coverage parts are included in my CPP, and which business risks are excluded or written separately? The package label does not show that auto, workers' compensation, professional liability, cyber, flood, or crime coverage is included.
- What are the limit, deductible, valuation method, and coinsurance requirement for each property coverage? The deductible, an inadequate limit, depreciation, or a coinsurance condition can reduce a payment.
- What event must occur before business-income coverage responds, and what are the limit, waiting period, and period of restoration? Business-income coverage is tied to the policy's covered property loss, conditions, and time limits.
- Which exclusions or endorsements change the standard property and liability coverage? Endorsements can add, remove, or modify coverage and exclusions.
- If the policy is changed, cancelled, or not renewed, what notice will I receive and what loss information can I request? Connecticut and New York set notice rules for commercial policies, and the rule that applies depends on the state and policy type.
Frequently asked questions
Four questions come up most often with this term.
Is a commercial package policy the same as a BOP?
No. Both combine business property and liability coverage. A business owners policy is generally a predesigned package for eligible small and medium-sized businesses, according to the NAIC (opens in a new tab), while a CPP is a broader package built from selected coverage forms and can fit more varied or specialized coverage parts.
Does a CPP cover every business risk?
No. Only the listed coverage parts, limits, and endorsements apply, and exclusions and conditions can remove or restrict coverage. Each part may have its own limit, deductible, and aggregate.
Can commercial auto be included in a CPP?
Commercial auto is one coverage part that may be available in a commercial package arrangement, but it is not included automatically.
Does a CPP include business interruption coverage?
It may. Business-income coverage depends on the selected form, covered property damage, causes of loss, exclusions, limit, waiting period, and period of restoration. The Connecticut Insurance Department (opens in a new tab) says it generally requires the specified physical loss or damage and follows the policy's language.