TUESDAY, OCTOBER 25, 2011
Differences Between BOP and CPP Contracts
A Business Owner Policy, often known as BOP, is business insurance contract which actually combines a few important coverages needed by a business owner in one package. A Business Owner Policy is primarily molded from two major coverages; (1) Commercial Property Coverage, on buildings and business content together with, (2) the Commercial General Liability coverage, which is also called CGL. Other than these two key coverages there are additional basic coverages which are conveniently offered by the majority of Business Owners Policies like, for example, Crime Coverage (robberies or safeburglary), in addition to employee dishonesty insurance (thievery or embezzlement made by staff members), external business advertising signs, and also income losses because of covered loss, also referred to as Business Interruption Insurance.
Few business owner policies may offer the possibility to put more coverages for extra premium money. The additional coverages may very well include professional liability insurance, auto liability insurance on vehicles operated but not owned by the business or employees for business purposes (a coverage known as Hired and Non owend Auto), employment practices insurance, Directors and Officers coverage, flood insurance and more. Dependant on the additional risks the business owner might need to meet, an owner of business and the insurance company can make preparations on additional components to be added the original package.
Alternatively a commercial package policy commonly known as CPP, is a "compilation of a number of 'monoline' insurance policies". It is a custom-made insurance package that provides two or more coverages opted by the owner of the business. It may possibly encompass only commercial liability and building coverages, for instance; or as a 2nd example, commercial general liability and business content; without the special coverages offered by the business owner policy such as business interruption, or crime insurance. These added coverages can be integrated with the Commercial Package Policy but at additional premiums, as opposed to the BOP. The total premiums for the CPP is the totals costs for all the monoline plans integrated in the package, with some premium allowance made.
Business Owner Policies were firstly progressed in the late 70s and have grown to be very standard style of commercial insurance for small-scale to mid sized ventures. BOPs integrates selected number of basic coverages necessary by a regular small or medium business into a standard policy at a cost that is often less than would be required to by those coverages individually, as in a Commercial Package Policy. Owners of businesses also love the simple style of the Business Owner Policy compared to buying a variety of small policies. The efficiency of the BOP also attracts insurance providers and allows them to supply a lower rate premium for the policy.
Business Owner Policies are not offered to all varieties of businesses. Depending on its 'appetite', an insurance company may or may not be willing to write BOPs for certain enterprises. For example, Insurer X may be keen to write BOPs for stores of tobacco this year, while Insurer Y may possibly not be interested to underwrite Business Owner Policies to the same type of businesses, but would instead be open to write only Commercial Package Policies. In the future, appetite could be reversed, and in the farther future there is a probability that neither company will be providing any BOP or CPP for this kind of business.
Neither BOP nor CPP may contain any workers compensation coverage or primary auto coverage added to them, with or without additional premiums. These to coverages are better provided under separate policies.