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Commercial Package Policy



Must have at least 2 parts: property and liability.


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...
1. Cancellation ( first named insured notified 10 days advance notice, pro-rate or short rate cnx),
2. Policy Changes ( must be mutual between insured and insurer; terms changed by endorsement),
3.Insurer examines books and records and audit during policy period and up to 3 years after expiration---initial premium is deposit),
4.Insurer makes inspections and surveys to establish insurability and determine proper premium charges at renewal,
5. First named insured is responsible for paying all premiums
6. 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...

1. Newly Acquired Property
25% of Cov A= max $250,000
10% of Cov B= max $100,000
(Up to 30 days)
2. Personal Property of Others
If B was purchased, this is covered up to
maximum of $2,500
3. Valuable Papers and Records
Up to $2,500 to research, replace, restore
lost info on docs
4. 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

5. 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