Ch. 6 - Packaging Commercial Policies - Commercial Package Policy (CPP)

Commercial Package Policy (CPP)

ch. 6-1

• It is a collection of different policies that, for the sake of convenience, hang out together.

• It packages insurances together to eliminate gaps in coverage.

Property polices available with the CPP

ch. 6-2

Both property and casualty policies can be purchased with the CPP.

Property:

• Building and personal property (BPP) or Commercial Property

• Business Interruption Policy (for indirect losses)

• Boiler and Machinery Policy (Equipment Breakdown Policy)

• Inland Marine Insurance, but not Ocean Marine Insurance

• Farm Policy but not involved in exam

Casualty policies available with the CPP

ch. 6-2

• Commercial general liability (CGL)

• Commercial Crime insurance

• Commercial auto policy

Packaging Commercial Policies is typically for…

ch. 6-3

• The CPP covers almost all of the insurance needs of the typical larger business.

• Small business buy a BOP (Business Owner’s Policy)

Common conditions Section of the CPP

ch. 6-3

• It contains obligations of Insured

• The Insured can cancel any time in writing with no advance notice needed

• If the Insurer cancels, 10 days notice must be given if the cancellation is due to nonpayment of premium. For any other cancellation by the Insurer, 30 days notice must be given (unless state laws say otherwise).

• The insurer may deliver the cancellation notice to the Insured’s last known mailing address.

• Cancellation by the Insureds results in a short-rate refund; cancellation by the Insurer will result in a pro rata refund.

• Only the first named insured has the authority to make changes in the policy or to cancel.

• The policy authorizes the insurance company to examine the books and records at any reasonable time while the policy is in effect or within three years after termination.

• The Inspection and Survey Provision gives the insurer the right, but not the obligation to inspect the property, survey the property, to give inspection reports to the Insured, and to make recommendations related to insurability issues.

• The insurer is authorized to recommend changes in the way the business is operated, but doesn’t warrant that any recommendation is the best course of action under the circumstances — the insurer doesn’t want to get sued if the recommendation causes further problems for the Insured.

• The insurer warns the Insured that the Insurer’s inspection is not intended to be a professional safety evaluation.

• The insured may assign the policy and its benefits only with written consent of the Insurer. If the insured dies, any rights and duties will automatically be assigned to the Insured’s legal representative.