Unit 9 Commercial Lines: Commercial Package Policy & Forms Flashcards
Commercial Package Policy (CPP)
Almost any business is eligible for a commercial package policy (CPP). It is a very flexible policy and combines two or more separate coverage lines/forms into one insuring contract. This coverage provides protection for commercial buildings and business personal property.
- Most flexible policy
- A la carte
- In Texas, a CPP has to have have Commercial General Liability (CGL) insurance added.
- Required a FIRST NAMED INSURED to be listed in the declarations page.
Commercial General Liability Insurance (CGL)
Insurance coverage against liable actions committed by business owner and/or employees.
In commercial lines insurance, who is responsible for the premium payments?
First names insured. This individual can also be thought of as the first point of contact.
What are the some key PROPERTY EXCLUSIONS (i.e. what property isn’t covered) under the CPP?
Accounts, bills, deeds, currency, money, and securities
Detached outdoor signs (but ATTACHED outdoor signs subject to $1,000 limit)
Property in the CARE, CUSTODY, or CONTROL of a bailee (e.g. dry cleaner, television repair shop, auto repair shop)
What are two key ADDITIONAL COVERAGES within the CPP?
DEBRIS REMOVAL… Limited to 25% of the actual loss–if expense exceeds 25% of the actual loss or if the policy has been exhausted, AN ADDITIONAL $25,000 is available/awarded.
$2,500 for electronic data PER POLICY PERIOD (in other words, $2,500 is the AGGREGATE LIMIT of the CPP for electronic data).
Business Interruption Coverage
Indirect consequential loss coverage. It is purchased by businesses to protect their income, there extra expenses, or both, as a result of a COVERED DIRECT LOSS. It can be purchased as BUSINESS INCOME coverage, EXTRA EXPENSE coverage, or both.
Business Income Coverage
Under BUSINESS INTERRUPTION COVERAGE, this coverage will reimburse the business owner of the loss of NET income PLUS continuing operating expenses.
Extra Expense Coverage
Under BUSINESS INTERRUPTION COVERAGE, this coverage will reimburse the business owner of any expense incurred to minimize the suspension of business and continue operations at the described premises or replacement premises.
Covers ONLY EXTRA EXPENSES to keep the business operating (i.e. costs associated with moving inventory to another facility, such as payroll, deposit, rent).
What must be true in order for a business to qualify to receive EXTRA EXPENSE COVERAGE?
Business must remain open (CANNOT SHUT DOWN) during the period of restoration or suffer a permanent loss in customers.
Peak Season Limit of Insurance
A selected endorsement of a CPP is used by businesses that experience seasonal fluctuation in their inventory (e.g. holiday stores). Provides an increase in coverage on business PERSONAL PROPERTY during a SPECIFIED period.
Equipment Breakdown/Machinery Breakdown Insurance
Although not a maintenance contract, this form protects against property damage resulting from SUDDEN and ACCIDENTAL breakdown of covered equipment/machinery; includes property in the insured’s care, custody, or control.
Inland Marine Coverage/Forms
A commercial property form designed to insure portable property, property subject to movement, or property that is not in the possession of it’s owner. Inland Marine forms are often called FLOATERS.
An alternative to the SCHEDULED PERSONAL PROPERTY ENDORSEMENT under a home owners policy.
Outdoor sign floater
An Inland Marine Policy endorsement used to insure ATTACHED signs that exceed $1,000 value (or in other words, used to insure outdoor signs that cannot be covered by the commercial property policy, as well as signs of others that are in the care, custody, or control of the insured).
Valuable papers and records floater
An Inland Marine Policy endorsement used to insure valuable papers and records, such as blueprints, manuscripts, maps, deeds, and business records.
** NOTE: Insured must keep all valuable papers and records in a FIREPROOF CONTAINER at all times when not in use or when the business is closed. Otherwise, the loss by fire is not covered.
