CPP
Must have at least 2 parts: property and liability.
CPP
Commercial Package Policy
Business clients may purchase any of the following commercial coverages as a mono line coverage or as a part of a CPP:
Commercial General Liability Commercial Property Equipment Breakdown Protection Farm Coverages Commercial Crime Commercial Inland Marine Commercial Auto
Four key components of a CPP
Common dec page
Interline endorsements (as needed)
One or more coverage parts
Common policy conditions
Common Policy Declarations Page:
Names of the parties, The policy period, A description of the insured's business, a schedule of coverage parts and the premiums charged for each, and The total policy premium
Interlink Endorsements:
Eliminates duplicate language and minimizes number of endorsements
One of more coverage parts:
Each part has its own separate Dec page
Common Policy Conditions:
6 conditions are…
- Cancellation ( first named insured notified 10 days advance notice, pro-rate or short rate cnx),
- Policy Changes ( must be mutual between insured and insurer; terms changed by endorsement),
- Insurer examines books and records and audit during policy period and up to 3 years after expiration—initial premium is deposit),
- Insurer makes inspections and surveys to establish insurability and determine proper premium charges at renewal,
- First named insured is responsible for paying all premiums
- Transfer of rights prohibited without permission of insurer,except at insured’s death
CPP property coverage part consists of
The dec page, property conditions form,one or more coverage forms, one or more causes of loss forms, and any applicable endorsements added.
CPP based on the
SFP policy
Each coverage must be listed on the
Declarations page and a premium paid
Commercial Building and Personal Property form
Most frequently used form…..
On the CPP, each coverage must be listed
On the declarations page and a premium paid
Commercial Building and Personal Property Coverage Form
There is no automatic coverage for
Business personal property (contents) unless it is listed on the dec and an additional premium is paid.
There is also no stacking on a Commercial Building and Personal Property Coverage Form.
Commercial Building and Personal Property form
Cov A covers…
Buildings with permanently installed equipment like a/c, built-in appliances, and personal property used to maintain or service the bldg such as fire extinguishers
(pay a premium, declare a limit)
Commercial Building and Personal Property form
Cov B covers…
Business Personal Property (Contents)
Includes stock, equipment, merchandise, office furniture, etc)
(Pay a premium, declare a limit)
Must appear on dec page to be covered!!!
Commercial Building and Personal Property form
Cov C covers…
Personal Property of Others left in the care, custody, and control of the insured.
(Pay a premium, declare a limit)
Commercial Building and Personal Property form
Three coverages don’t stack. They are chosen individually if wanted. They are…
Cov A-Buildings
Cov B-Business Personal Property
Cov C- Personal Property of Others
Commercial Building and Personal Property form
Additional Coverages are…
Debris Removal -25% of total payment made for the loss
Removal of Business Personal Property- 10 days (DP-1 is 5 days, DP-2 and DP-3 are 30 days)
Fire Dept Service Charge-up to $1,000
Cost of Extracting Pollutants-up to $10,000
Commercial Building and Personal Property form
The co- insurance can be as low as 50% or as high as 100%. The higher the co insurance percentage you choose,
The lower your rates will be.
If you choose 80% co- insurance or higher, you get
Five extensions of coverages at no extra charge
With 80% co-insurance,the five extensions of coverages at no extra cost are…
- Newly Acquired Property
25% of Cov A= max $250,000
10% of Cov B= max $100,000
(Up to 30 days) - Personal Property of Others
If B was purchased, this is covered up to
maximum of $2,500 - Valuable Papers and Records
Up to $2,500 to research, replace, restore
lost info on docs - Business Personal Property (other than
stock) while temporarily off the premises
Max $10,000 ( excludes personal prop in
motor veh, c/c/c of salesperson, or at a
fair/exhibition - Outdoor Property
Fences, antennas, signs not attached to
building, trees/shrubs/plants
(Max $1,000 but not more than $250 per one
tree, shrub or plant)
Commercial Building and Personal Property form
Standard Deductible-$250 per occurrence regardless of # of buildings
Claims paid ACV
Inflation Guard Endorsement may be added
May cover on a blanket or specific property basis
Can use reporting forms (Inurance Cov will fluctuate or this is also used due to large changes in inventory)
Builders Risk Form
Designed for buildings under construction
Based on completed value basis (average)
Claims paid ACV
Automatically terminates when builder’s interest in the property ceases,the property is sold, or 90 days after construction is completed
Covers direct losses, indirect losses aka time-element losses aren’t covered unless the peril causing the direct loss is covered first
Consequential Loss
Aka indirect loss or time element losses.
The amount of loss directly linked to the time it takes to repair or rebuild the damaged property
Examples from DP and HO were rental value and loss of use (additional living expense)
Business Income Coverage Form (Business Interruption) may be added to CPP
Applies to losses and expenses related to an interruption of normal business operations
Losses incurred during period of restoration are covered
Pays net profit or loss before taxes plus continuing operating expenses (business income)
No deductible
Contingent business interruption insurance is available as an optional coverage
Period of restoration
Begins on date that the direct physical loss occurred and it ends on the date that the damaged property should be repaired, rebuilt, or replaced by the insurance company
Contingent Business Interruption
Business income from dependent properties available as optional coverage
This protect’s an insured’s business interruption due to loss or damage to property that the insured does not own, operate or control.
Extra Expense Coverage Form
May be added to CPP or combined with business income coverage form.
It covers actual and necessary extra expenses sustained due to direct physical loss (basically extra expenses you incurred over and above your normal business expenses.)
It doesn’t over loss of business income.
Commercial Building and Personal Property form, Builders risk form, business income form, and extra expense form must have a
Cause of Loss Form attached.
Cause of Loss forms
Basic Cause of Loss, Broad Cause of Loss, and Special Cause of Loss
Basic Cause of Loss
Named perils
Fire, lightning, WHARVVES, vandalism, sprinkler leakage, sinkhole collapse, and volcanic action
Lowest premium charge
Broad Cause of Loss
More named perils
It covers…
Fire, lightning, WHARVVES, vandalism, sprinkler leakage, sinkhole collapse, and volcanic action + four additional perils:
Glass breakage ($100 per pane and $500 per occurrence), falling objects, weight of ice/snow/sleet, and water damage other than flood.
Special Cause of Loss
All-risk to building and business personal property
Theft is covered ($2,500 limit on furs, jewelry, watches and precious stones)
If it is not excluded, it is covered
Earthquake Form
May be added to the Cause of Loss form if purchased.
2 more perils added: earthquake and volcanic eruption
Deductible is percentage of the policy limit