What Are Package Policies?
Package policies, also called multi-line policies, are insurance policies that combine various basic property and liability policies into a single, larger policy. In so doing, they reduce the number of contracts and records involved, often make the policy easier to understand, and can also reduce the overall cost to obtain a series of coverages. They also allow for the creation of customized policies for the particular needs of an insured. Homeowners insurance, which combines property, liability, and theft coverage, is a common example of a package policy.
What Are Commercial Package Policies?
In the business context, these policies are generally referred to as commercial package policies (CPPs). With CPPs, you, the business owner, can cover virtually all types of commercial risk in a single policy. The following are the types of coverage your CPP can contain:
- Commercial property
- Commercial inland marine
- Commercial general liability
- Boiler and machinery
- Commercial crime
- Commercial auto
Two kinds of coverage not available in a CPP are ocean marine and aviation insurance.
Commercial Package Policy Structure
The general structure of a CPP consists of these three parts:
- Policy declarations that apply to all coverages--This information includes the insured's name and address, the policy period, a description of the business, the types of coverage chosen, and a list of the applicable forms.
- Policy conditions that apply to all coverages--The types of conditions in this section include cancellation, making changes, premium payment and return, the insurance company's rights to examine your records, the insurance company's rights to inspect your premises, and assignment of your rights and responsibilities.
- Two or more coverage parts--A CPP combines at least two lines of coverage that could otherwise exist in individual (mono-line) policies. Each line of coverage is represented in the CPP by a coverage part, which presents the provisions that are unique to that type of coverage.
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