Long Term Care
The Commercial Package Policy or the BOP?
Question: What is the difference between a Commercial Package Policy and a Businessowners Policy?
Answer: They are similar in coverages available. The primary difference is eligibility and the fact that the BOP is a self contained package with the desirable coverages automatically included. It cannot be used for places of amusement (like arcades) or financial institutions (like banks or credit unions.)
Question: Why would I choose the Commercial Package Policy?
Answer: It is designed to meet the needs of large and small businesses and can be customized through the use of different coverage parts and endorsements. The Commercial Package Policy can have most anything added to it except Auto, Workers Compensation, Bonds, Ocean Marine, Airplane coverage, Boat Coverage, Flood, Difference in Conditions, and the non-filed Inland Marine. With the advent of the new auto changes, we may be able to add auto to the package policies now.
Questions: Are the policies structured differently?
Answer: Yes, the commercial package is built depending on what exposures you need to cover. It has a couple of basic parts (Common Policy Declarations and the Common Policy Conditions) then you add the parts you need. You “build” your policy. Kind of like a submarine sandwich. The two pieces of bread of the “policy sandwich” would be the common policy declarations and conditions and the contents are the parts of the policy you add.
The mandatory parts are Section I – Property and Section II – Liability. Then you add on whatever parts needed by the business and they can afford.
Section I is Property
- Coverage A is the building
- Coverage B is the business personal property
- Coverage C is Property of others left in the insureds CCC
Section II (2) is liability
- Coverage A is business liability (also called commercial general liability) for bodily injury and property damage to others
- Coverage B is personal and advertising injury (hurting feelings)
- Coverage C is medical payments to others (no liability is necessary)
- Coverage D is fire legal liability (per fire limit)
B: Other parts that can be added - each part will have its own declarations and conditions unique to that form
- Boiler and Machinery
- Commercial Crime
- Commercial Glass
- Professional Liability (added to section 2 - liability)
- Commercial Inland Marine
- Controlled classes can be added, not the uncontrolled ones. They have to be issued monoline or attached with no credit given
- Commercial Farm coverage
- Employment Practices
The decision of BOP or Commercial Package is one of eligibility and coverage. If it fits on a BOP and pricing is a major concern then that would be the choice. If the insured has large or unique exposures then the Commercial Package is the only choice.
Tips of the Trade by Mary Roth CPCU