Commercial Package Policy (CPP)

Cedar & Oak Furniture Co., a 14-employee custom furniture maker in Grand Rapids, Michigan, outgrew its Businessowners Policy when it leased a second 9,000-square-foot workshop. Its broker bundled the exposures into a Commercial Package Policy with an annual premium of $18,400. The package carried a commercial property section insuring the building for $1,200,000 and business personal property (lumber, finished pieces, and CNC equipment) for $650,000, subject to a $2,500 property deductible and an 80% coinsurance clause.

The liability section provided a general liability limit of $1,000,000 per occurrence and a $2,000,000 aggregate. The owner also added a business income section with a $400,000 limit and a separate equipment breakdown section with a $25,000 sublimit for the CNC router.

Eight months in, a dust-collector fire destroyed part of the finishing room. The property claim totaled $310,000 in damage; after the $2,500 deductible, the carrier paid $307,500. Because the shop closed for six weeks, the business income section reimbursed $96,000 in lost net profit plus $14,000 of continuing payroll. Separately, a delivered console tipped and injured a customer; the liability section covered $48,000 in medical bills and $22,000 in defense costs. Bundling these lines into one CPP instead of three monoline policies saved Cedar & Oak roughly $3,100 a year and consolidated everything under a single declarations page and renewal date.