A Commercial Package Policy (CPP) is a popular choice for businesses looking to bundle multiple insurance coverages into a single, cost-effective policy. It offers flexibility and convenience by allowing businesses to customize coverage to suit their specific needs. However, not all types of insurance can be included in a CPP. In this blog, we’ll explore what cannot be bundled into a CPP and why businesses may need separate policies for these coverages.
1. Workers’ Compensation Insurance
Workers’ compensation insurance is required by law in most states and provides coverage for medical expenses, lost wages, and rehabilitation costs for employees injured on the job. Since it is regulated at the state level, it must be purchased as a standalone policy and cannot be included in a CPP.
2. Health and Disability Insurance
A CPP does not cover health or disability insurance for employees. Businesses must obtain separate policies to provide health benefits or disability coverage, which can help employees recover from injuries or illnesses unrelated to work.
3. Life Insurance
Life insurance policies, whether for key employees or general staff, cannot be included in a CPP. These policies provide financial protection to beneficiaries in the event of an insured individual’s death and must be purchased separately.
4. Directors & Officers (D&O) Liability Insurance
D&O insurance protects company executives from lawsuits related to mismanagement, breach of fiduciary duty, or regulatory violations. Since these claims are highly specialized, this type of coverage is not part of a standard CPP.
5. Employment Practices Liability Insurance (EPLI)
EPLI covers claims related to wrongful termination, discrimination, sexual harassment, and other workplace disputes. Because it deals with employment law violations, businesses must obtain this insurance separately.
6. Professional Liability Insurance (Errors & Omissions – E&O)
For businesses that provide professional services, E&O insurance protects against claims of negligence or mistakes in service delivery. Since it is industry-specific, it cannot be included in a CPP and must be purchased separately.
7. Flood and Earthquake Insurance
Most standard commercial property policies do not cover natural disasters like floods and earthquakes. Businesses operating in high-risk areas need to purchase separate policies or endorsements for adequate protection.
8. Commercial Auto Insurance
A CPP does not include coverage for company-owned vehicles. Businesses need a Commercial Auto Policy (CAP) to protect against liabilities and damages related to vehicle use for business operations.
9. Surety Bonds
A surety bond guarantees contractual obligations and compliance with laws. These are typically required for construction companies, government contracts, or other industries and must be purchased separately from a CPP.
Why Understanding Exclusions is Important
While a Commercial Package Policy offers valuable coverage, understanding its exclusions ensures businesses obtain the additional protection they need. Failing to secure separate policies for excluded risks can leave a company vulnerable to significant financial losses.
If you’re unsure which coverages your business requires, consulting with an experienced insurance agent can help tailor a policy package that meets your specific needs. Contact us today to find the right combination of coverage for your business!