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9.1 Commercial Package Policy (CPP)

A Commercial Package Policy (CPP) allows a business to combine multiple commercial insurance coverages into one policy. This gives the business flexibility to select the coverage parts that best match its property, liability, and operational risks.

A CPP is especially useful for larger businesses or businesses with specialized exposures because it can be tailored to address a variety of insurance needs. Rather than purchasing several separate policies, the business may choose one or more eligible coverage parts and combine them into a single package policy.

Common coverage parts that may be included in a Commercial Package Policy include:

  • Commercial Property
  • Commercial General Liability
  • Commercial Auto
  • Commercial Inland Marine
  • Commercial Crime
  • Farm Property and Liability
  • Equipment Breakdown Protection, also known as Boiler and Machinery Coverage

Each of these coverage parts may also be written as a separate monoline policy, meaning the coverage is provided in its own individual policy. However, many businesses have several related commercial exposures that are better addressed together. For this reason, a Commercial Package Policy (CPP) is often a more efficient and effective option. By combining selected coverage parts into one policy, a CPP helps businesses organize their insurance protection and address multiple commercial risks under a coordinated policy structure.

When multiple coverage parts are included in the same Commercial Package Policy, some coverages may overlap. To avoid duplicate coverage or conflicting policy provisions, interline endorsements are used. An interline endorsement applies across more than one coverage part. Its purpose is to coordinate the coverages within the policy so that each coverage part works together properly with the others. This helps clarify how coverage applies and prevents unnecessary duplication within the Commercial Package Policy.

Every Commercial Package Policy (CPP) includes two important common policy components: the Common Policy Declarations page and the Common Policy Conditions form. These sections apply to the entire policy, no matter which coverage parts are selected. The Common Policy Declarations page identifies general policy information, such as the named insured, policy period, coverage parts included in the policy, and applicable premiums. The Common Policy Conditions form contains conditions that apply to all coverage parts in the CPP.

For example, one business may choose to package Commercial Crime and Commercial General Liability coverage, while another business may choose to package Commercial Inland Marine and Business Auto coverage. Although these businesses have different coverage needs and different coverage forms, both CPPs will include the same Common Policy Declarations and Common Policy Conditions forms.

Common Policy Declarations​

The Common Policy Declarations page identifies the coverage parts included in the insured’s Commercial Package Policy (CPP) and provides the key information needed to understand how the policy is structured. This page serves as a summary of the policy’s essential details, including the policy number and the basic information about the insured, insurer, coverage period, insured locations, premiums, and deductibles.

The Common Policy Declarations page generally answers the following questions: Who is insured? The Declarations page identifies the named insured, which is the individual or business entity for whom insurance is provided. A policy may include more than one named insured. The first named insured, meaning the person or entity listed first, has certain additional rights and duties under the policy. The insurer’s name is also shown.

What is insured? The Declarations page describes the business or commercial operation being insured.

When does coverage apply? The policy period shows the effective date and expiration date of the policy. Policies commonly begin and end at 12:01 a.m. on the dates shown in the Declarations. Commercial Package Policies are typically written for a one-year policy term.

Where does coverage apply? The Declarations page includes the mailing address of the named insured and the address or addresses of the insured buildings or locations.

How much does coverage cost? The Declarations page lists the premium charged for each coverage part included in the CPP, as well as the total policy premium. If no premium is shown for a coverage part, that coverage is not provided. Any applicable deductibles are also shown on the Declarations page.

In addition to the Common Policy Declarations page, each coverage part may include its own separate Coverage Part Declarations page. This page provides information that applies only to that specific coverage part. For example, the Commercial Property coverage part may have declarations showing the covered buildings, property limits, causes of loss forms, and deductibles. The Commercial Auto coverage part may have declarations showing covered autos, liability limits, physical damage coverage, and applicable symbols. These separate declarations pages allow each coverage part to include the specific details needed for that type of insurance, while the Common Policy Declarations page continues to apply to the CPP as a whole.

Common Policy Conditions​

The Common Policy Conditions form explains the general rights, responsibilities, and duties that apply to both the insured and the insurer. These conditions apply to the entire Commercial Package Policy (CPP), regardless of which coverage parts are included. The Common Policy Conditions help establish how the policy will operate. They address important matters such as cancellation, changes to the policy, examination of the insured’s books and records, inspections and surveys, premium payment responsibilities, and the transfer of rights and duties under the policy.

Cancellation​

The cancellation condition explains who may cancel the policy and how much advance written notice must be provided. The first named insured may cancel the policy at any time and for any reason by giving the insurer advance written notice. When the first named insured cancels the policy, any unearned premium returned by the insurer is calculated on a short-rate basis. A short-rate cancellation means the insurer keeps a portion of the unearned premium as a cancellation charge because the insured chose to cancel the policy before the end of the policy term.

The insurer may also cancel the policy, but only according to applicable insurance regulations and the terms of the insurance contract. When the insurer cancels the policy, the insurer must provide notice of cancellation to the first named insured. If the insurer cancels the policy before the end of the policy term, any unearned premium is returned to the first named insured on a pro rata basis. A pro rata cancellation means the refund is based on the amount of time remaining in the policy period. Unlike short-rate cancellation, no cancellation penalty is charged when the insurer cancels the policy.

Changes​

The first named insured has the authority to request changes to the policy, but any change must be approved by the insurer. Policy changes are not made informally or by verbal agreement. Instead, changes must be made by an endorsement, which is a written amendment added to the policy by the insurer. This condition helps ensure that any changes to the Commercial Package Policy are clearly documented and become part of the official policy contract.

Examination of Your Books and Records​

The insurer has the right to examine and audit the insured’s books and records as they relate to the policy. This right applies during the policy period and continues for up to 3 years after the policy expires. This condition allows the insurer to verify information that may affect coverage, premiums, or policy administration.

Inspections and Surveys​

The insurer has the right, but not the obligation, to inspect the insured’s premises and conduct surveys at any time. These inspections or surveys are performed for underwriting and rating purposes, such as evaluating the risk and determining appropriate premiums. It is important to understand that these inspections are not safety inspections. The insurer is not guaranteeing that the premises are safe or that all hazards have been identified. The responsibility for maintaining safe premises remains with the insured.

Premiums​

The first named insured is responsible for paying the policy premiums. If the insurer owes a return premium, such as when a policy is canceled or adjusted, the return premium will be sent to the first named insured. This condition is important because the first named insured serves as the primary party responsible for premium-related matters under the policy.

Transfer of Your Rights and Duties Under This Policy (Assignment)​

The insured’s rights and duties under the policy may not be transferred to another person or organization without the insurer’s written consent. This means the insured cannot assign the policy to someone else unless the insurer agrees in writing. An exception applies if a named insured dies. In that case, the deceased named insured’s rights and duties under the policy automatically transfer to the named insured’s legal representative. This allows the legal representative to act on behalf of the deceased insured’s estate.