9.0 Commercial Package Policy & Commercial Property Coverage

Learning Objectives

Upon the completion of this chapter, you will be able to:

1. Recognize the structure and major components of the Commercial Package Policy (CPP).
2. Distinguish among the different Causes of Loss forms used in commercial property insurance.
3. Identify the types of property covered under the Building and Personal Property Coverage Form.
4. Describe the Additional Coverages, Coverage Extensions, and Optional Coverages available under the Building and Personal Property Coverage Form.
5. Define the exclusions, limits of insurance, deductibles, and loss conditions that apply to commercial property coverages.
6. Identify specialized commercial property coverages available for buildings under construction, condominium associations and unit-owners, legal liability for property damage, and loss of business income.
7. Recognize common endorsements that may be added to commercial property coverage forms.

Overview

The Commercial Package Policy (CPP) was developed by the Insurance Services Office (ISO) to provide flexibility when insuring commercial risks. Because businesses may have different property and casualty exposures, the CPP allows various commercial coverage forms and endorsements to be combined into one package policy. The CPP is organized into separate coverage parts. Each coverage part addresses a specific type of insurance, such as commercial property, commercial general liability, commercial crime, or other eligible commercial lines coverage. These coverage parts may be added in different combinations to meet the needs of the insured business. A standardized policy format helps avoid repetition when multiple coverage parts are included in one policy. Instead of repeating the same basic policy information in each coverage part, the CPP uses a uniform structure so common information can apply across the package policy.

This chapter introduces the Commercial Package Policy (CPP) and explains the required components that make up this type of policy. The CPP is designed to combine multiple commercial coverage parts into one policy, allowing the insured business to address different property and casualty exposures in a coordinated way. The chapter then focuses on the Commercial Property Coverage Part. This includes a discussion of the available Causes of Loss forms, which determine the perils insured against for commercial property losses. The chapter also examines the forms and endorsements used to insure commercial buildings, business personal property, and other property exposures commonly faced by businesses. Other commercial coverage parts, such as liability and auto coverages, are introduced separately in later chapters.

An Insurance Story

Sofia’s family owns a mid-size furniture and appliance business called The Furniture Company. The business operates several retail locations in the region, uses its own vehicles to deliver furniture and appliances, and provides appliance installation and repair services for customers.

Because of these operations, The Furniture Company faces several types of risk. Its buildings, merchandise, equipment, and business personal property could be damaged by covered causes of loss. Its delivery vehicles create business auto exposures. Customers could be injured while visiting a store, and the business could also face liability claims if an appliance is improperly installed or repaired.

A Commercial Package Policy (CPP) allows the owners of The Furniture Company to select the coverage parts needed for these different exposures. By combining the appropriate commercial property, liability, auto, and other coverages into one package policy, the business can address multiple insurance needs under a coordinated policy structure.

The Commercial Package Policy (CPP) is made up of several required components:

Common Policy Declarations	Common Policy Conditions

PLUS

Commercial Property Coverage Part	Commercial General Liability Coverage Part	Commercial Automobile Coverage Part	Commercial Inland Marine Coverage Part
Chapter 9	Chapter 10	Chapter 11	Chapter 12

Commercial Crime Coverage Part	Equipment Breakdown Coverage Part	Farm Property & Liability Coverage Part
Chapter 13	Chapter 14	Chapter 14

EQUALS Commercial Package Policy