Business owner's policy (BOP) vs. commercial package policy (CPP)

While both a business owner's policy and commercial package policy allow you to combine separate insurance policies into one policy, there are a few key differences between the two.

A business owner’s policy combines general liability coverage and commercial property insurance into a single policy. It is typically less expensive than buying these coverages separately.

A commercial package policy allows you to combine multiple business insurance policies, with different limits for each covered loss, to suit your business needs.

This includes coverage for general liability and commercial property insurance, as well as the flexibility to add endorsements for other policies, such as:

• Commercial auto insurance
• Commercial crime insurance
• Business interruption insurance (also known as business income insurance)
• Inland marine insurance
• Professional liability insurance
• Electronic data processing coverage
• Errors and omissions insurance
• Employment practices liability insurance (EPLI)
• Equipment breakdown coverage
• Pollution liability coverage
• Commercial umbrella insurance

With a CPP, you can set higher coverage limits for areas with greater risk exposure. For example, you can use it to fine tune coverage for risks like vandalism or bodily injuries.

You can also set lower coverage limits for risks where you’re less likely to face a claim, which can help keep your premiums more affordable.

As with a BOP, it is typically cheaper to bundle multiple policies than buy them separately.

The main difference between a CPP and a BOP is who it’s designed for. Depending on the size and risk level of your small business, one or the other may be better suited for you.

A BOP is rather simple and straightforward. You combine your general liability and commercial property insurance into one policy and get a lower premium.

Business owners in low-risk industries will usually qualify for a business owner’s policy. The general requirements for a BOP are:

• Less than 100 employees
• A relatively small workspace
• Less than $1 million in annual revenue
• Low-risk industry
• Less than 12 months of business interruption insurance

Small businesses with limited risk exposures often will match up with a business owner’s policy. For example, a small retailer would benefit from getting a BOP to save money on premiums, while insuring their business against slip-and-fall accidents and other claims.

A CPP is more extensive because it allows you to combine two or more liability policies, with more coverage options than a BOP would allow. With a CPP, you can increase your coverage limits in some areas where you face greater risk, and reduce your policy limits for risks where you’re less likely to face a claim.

Midsized businesses and those with larger risks often match up with a commercial package policy. A CPP is also for useful for small and medium-sized businesses that need a customizable approach to risk management since it provides coverage options that go beyond a BOP and offers underwriting that addresses their specific needs.

For example, a CPP is a better fit for a restaurant or bar owner because they face greater risk exposures from bodily injury and other claims. They can enhance their insurance coverage with added policy endorsements and increase their policy limits in certain areas to cover their greatest risks.

A business owner’s policy allows general liability and commercial property insurance to be combined into one insurance policy.

It’s possible to add other types of insurance, such as cyber insurance and business interruption insurance (also called business income insurance), but options are limited.

A commercial package policy allows for many liability policies to be combined, yet this does not include workers’ compensation insurance, directors and officers insurance, group life insurance, and disability policies.

Complete Insureon’s easy online application today to compare commercial coverages and insurance quotes from top-rated U.S. insurance companies. You can also discuss your business insurance needs with an insurance agent. Once you find the right policy for your small business, you can begin coverage in less than 24 hours.