When it comes to your Commercial Package Policy insurance, it’s imperative you understand what’s excluded and what’s not.
Did you know that the most common insurance claim made by small businesses is burglary and theft, but the most expensive claim is reputational harm (i.e. libel, slander, and violation of privacy).
What is a Commercial Package Policy?
Commercial Package Policy (CMP) is an insurance package for small businesses that cover General Liability Insurance and Commercial Property Insurance.
While a Commercial Package Policy covers many basic risk exposures small business face, you should know what is excluded to ensure your business has the proper coverage.
All-Risk or Named Peril Policy
If your CMP Policy is written as an all-risk policy, your business is covered for all perils except against losses that are caused by something specifically excluded in the policy. On the other hand, named peril coverage only covers specific losses that are listed on the policy. Such as fire, lightning, explosion. Water damage is often excluded on a named perils policy.
10 Common Exclusions on Commercial Package Policies
Below is a list of exclusions on a CMP policy that may require you to obtain additional coverage:
- Weather conditions, including earthquakes.
- Water damage caused by flooding, seepage, and sewer backup.
- Smog or pollution.
- Operations executed by the government, including nuclear hazard and military actions.
- Intentional illegal actions or fraud performed by the named insured, or the employees of the named insured.
- Failure or malfunction of the computer system of the named insured or in computer operations.
- Damage or loss caused by normal wear and tear, decay, rust, or corrosion.
- The explosion of machinery or power failure.
- Property loss due to faulty design, planning, or development.
- Terrorism is not covered.