When it comes to Business Insurance, every policy has policy conditions. Below are the Common Policy Conditions of the Commercial Package Policy (CPP). The common policy conditions address cancellation of the policy, changes in the policy, examination of the insured's books and records, inspections and surveys, premiums, and transfer of the insured's rights and duties under the policy.
The insured may cancel the policy at any time by mailing or delivering written notice of cancellation to the insurance company. If two or more insured's are listed in the declarations, only the one listed first (first named insured) can give notice of cancellation.
The Common Policy Conditions include a clause relative to making changes to the policy. It states that the policy constitutes the entire contract between the two parties. It can only be changed by written endorsement issued by the insurance company. Such changes may be made with the insurance company's consent, upon request of the first named insured.
Examination of Books and Records
The insurance company reserves the right to examine and audit the insured's books and records relative to the policy at any time during the policy period and for up to three years after the termination of the policy. This provision is included because many commercial property and liability coverages are issued with estimated premiums. The final premium is actually determined after the policy expires based on reported values from the insured by the audit called the Premium Audit.
Inspections and Surveys
This provision gives the insurance company the right to inspect the insured's premises and operations at any reasonable time during the policy period. These inspections are important in determining the proper insurability of the insured's property and operations. The insurance company may inform the insured of the results of the inspection and may recommend changes. However, they do not have the duty or obligation to do either.
The insured named first in the declarations (first named insured) is responsible for the payment of premium under the policy. Also, any return premium under the policy will be paid to the first named insured by the insurer.
Transfers of Rights and Duties Under the Policy
The insured cannot transfer any rights or duties under the policy to any other person or organization without written consent of the insurance company. For example, if the insured sells a business or property, or both, the policy cannot be transferred to the new owner without written consent of the insurance company.
If you have any questions about these Common Policy Conditions or need assistance finding them in your policy, please feel free to contact me. Also, if you have questions about anything else pertaining to Business Insurance, as always, I'm happy to help.
Commercial Insurance Agent