Business Owners Policy vs. Commercial Package Policy: Which is Better for Your Business?

In a poll by Insureon and Manta, it was found that only 8% of small business owners have ever filed for bankruptcy, but only 28% of respondents have a business owner’s policy. While confidence is high and a good sign of the small business economy in the United States, investing in a Business Owner’s Policy (BOP) or Commercial Package Policy (CPP) is still imperative.

Opening a small business is exciting, but there’s more to worry about than just building off an idea. Understanding that businesses, no matter how small or big, need insurance coverage, like a Commercial Package Policy, should be in every company’s DNA. While policies can be hard to understand there is help out there to pick the one that’s right for any size of business. A great place to start is finding that best option between a Business Owner’s Policy and a Commercial Package Policy.

Comparing Policies

Each of the insurance policies listed above provides enough coverage to start with, but they do have differences when it comes to business needs. Some companies may work better with a BOP, other businesses may benefit from having a CPP. Eligibility and coverage needs based on the size of business determines which package is the best fit.

Business Owners Policy

It’s more suitable for small businesses to opt for a BOP, as they are restrictive of the type of business and square footage of the workplace. Here are a few businesses that go well with a BOP:

  • Office buildings
  • Wholesalers
  • Contractors
  • Apartment buildings

Looking for coverage for personal property? A BOP covers that. From business buildings to assets inside to loss of income when disasters happen, a BOP takes care of all these. However, a BOP is a more of an economic option for small businesses. There is no health insurance, disability insurance, or even workers compensation; those are separate policies the business owner would have to add separately. So, a BOP maybe better for your budget, but does run the risk of causing issues when it comes to coverage.

Commercial Package Policy

If a small business owner is looking for coverage that has more flexibility, then a Commercial Package Policy is the better option. A CPP is perfect for those who are a larger company and need more protection than what a BOP can offer. CPPs are more personal and customize to a business owners needs.

Getting a CPP is usually more bang for your buck, as it’s cheaper to group policies together instead of separating them. CPPs can lower deductibles and provide more coverage than past policies, all for around the same price. But like a BOP, a CPP doesn’t include health insurance, workers compensation, disability insurance, life insurance, and D&O liability.

Just the option to customize an insurance policy is enough to choose a Commercial Package Policy. The choice is up to the business owner. Before an investment is made it’s best to compare both policies and see which matches up with your business’s needs.

About Walker & Associates

If you’re in the market for a new insurance partner, do your homework to ensure a lucrative venture and positive relationship. Contact us online at Walker & Associates Insurance or by phone at (800) 213-7126 for your insurance needs. We can explain your coverage options and how much coverage will cost.