Businesses in Massachusetts are exposed to a number of potential risks on a daily basis. To protect themselves from the many different perils they face, businesses often need several insurance policies. Thankfully, it’s easy to get multiple individual policies through a commercial package policy (otherwise known as CPPs).
CPPs give businesses a way to bundle several individual insurance policies together. The policies included in a commercial package policy usually must be commercial policies (as opposed to personal policies), but businesses typically have a wide variety of commercial policies to choose from. Businesses are able to select only policies that are relevant to their needs, thus creating a customized insurance solution.
Commercial package policies are highly flexible and can include many different coverages. Just a few potential individual policies that a business might select to include in a package policy are:
Commercial package policies and business owner policies (BOPs) both combine commercial insurance policies into a single package. These two forms of package policies differ in significant ways, though.
As mentioned, CPPs offers businesses with a flexible insurance solution that can include a variety of individual policies. This form of commercial insurance can include common coverages, such as general liability insurance, and highly specialized coverages, like pollution liability insurance.
BOPs, in contrast, primarily provide common insurance policies. While exact coverages vary, most BOPs include coverages like general liability insurance, commercial property insurance, and business interruption insurance. They don’t normally contain specialized coverages, like inland marine insurance or terrorism insurance, that only certain businesses need.
Bundling commercial policies together gives businesses the same benefits that individuals receive when they bundle personal policies together. First, businesses are able to pay one premium rather than several, which simplifies bookkeeping. Second, insurers often offer discounts for purchasing multiple policies from them.
Both CPPs and BOPs have their uses, and both can be very effective ways to protect a business. Which one a business should get, however, depends on its insurance needs.
In general, BOPs are for small businesses with only basic insurance requirements. For instance, a home-based consulting business in Springfield, MA might be able to get by with the coverages that a BOP provides.
CPPs is usually purchased by businesses that either are too large to qualify as small businesses or do work that exposes them to unique risks. Some examples of Massachusetts businesses that may need a commercial package policy might include the following: