Bundling insurance policies can help businesses save on coverage costs. Business owner’s policies (BOPs) and commercial package policies (CPPs) both allow businesses to purchase multiple insurance policies in order to save money and ensure they are covered against common risks.
Business owner’s policies include three core insurance policies for small businesses that need affordable coverage, while commercial package policies are more customizable and better for larger businesses with specific coverage needs.
Here’s everything you need to know about business owner’s policy vs commercial package policy.
What is a Business Owner’s Policy?
A business owner’s policy is an insurance policy that bundles together three core coverages that most, if not all, small businesses need.
These coverages include general liability insurance, commercial property insurance, and business income insurance.
General liability insurance protects businesses against claims of bodily injury or property damage that a business causes to a third party. This coverage can cover costs like medical bills and legal defense fees that result from claims.
Commercial property insurance covers your business property and its contents against damages caused by covered hazards, including fires, vandalism, and theft. If your business property is damaged by a covered peril, property insurance can help cover the cost to repair or replace your property.
If your business is forced to temporarily suspend operations, such as to recover from a fire, business income insurance, also called business interruption insurance, can provide financial support by paying for lost wages, rent, and other necessary expenses.
How Much Does it Cost?
The cost of a business owner’s policy can vary significantly depending on several factors, including:
- Business size
- Type of business
- Number of employees
- Number of clients
- Claims history
- Optional coverages
Business owner’s policies are designed to offer affordable coverage for small businesses. As a result, a BOP is generally cheaper than purchasing these policies separately, making it a great option for small businesses that need to save money without sacrificing important coverage.
What is a Commercial Package Policy?
Like a BOP, a commercial package policy bundles several policies together to help businesses get the coverage they need at an affordable rate.
However, while BOPs typically contain the same three core coverages and are designed for small businesses, commercial package policies offer customizable solutions for larger businesses with specific coverage needs.
Most CCPs include the same two standard coverages: general liability insurance and commercial property insurance.
In addition to these two core coverages, CCPs can be customized to suit your business’ needs. You may be able to choose from the following coverages when purchasing a CCP:
- Business income insurance
- Commercial auto insurance
- Business crime insurance
- Errors and omissions (E&O) insurance
- Pollution liability insurance
- Equipment breakdown insurance
- And more
While CCPs can be customized to meet your company’s needs, it’s important to note that there are certain policies that can’t be bundled into a CCP, including:
- Directors and officers (D&O) insurance
- Workers’ compensation insurance
- Life insurance
- Health and disability insurance
These coverages cannot be included in a CCP and must be purchased separately.
Which is Right for You?
When choosing between a business owner’s policy and a commercial package policy, the right choice largely comes down to the size of your business and the type of business you conduct.
Who Needs a Business Owner’s Policy?
Business owner’s policies are designed specifically for small businesses. Most insurance companies have criteria that your business must meet in order to be eligible to purchase a BOP.
These criteria may vary from one insurance company to another, but in general, your business needs to have fewer than 100 employees, be smaller than 25,000 square feet, or have less than $5 million in annual revenue.
However, it’s important to communicate with our insurance provider to understand what requirements your business must meet in order to purchase a BOP.
Who Needs a Commercial Package Policy?
Commercial package policies are better for larger businesses that don’t qualify for a BOP and businesses that have demanding risk profiles.
Businesses that don’t meet the criteria required to purchase a BOP still need many of the same basic coverages offered by a BOP, including general liability and commercial property insurance.
A CCP makes it possible for these businesses to purchase these coverages alongside other coverages they might need at an affordable rate.
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Both business owner’s policies and commercial package policies bundle several core coverages together to help businesses get the coverage they need at reasonable rates.
At KSA Insurance, we work with businesses in South Carolina and across the southeastern United States to help them find affordable business insurance policies that protect their business property, employees, and customers against a variety of common risks.
Contact us today to get a quote and learn more about business owner’s policies and commercial package policies.