What is 'Commercial Multiple Peril Policy'

A commercial multiple peril policy offers at least two forms of coverage, including a variety of losses incurred from numerous causes. Commercial multiple peril policies can cover a variety of losses incurred from numerous causes. Some of the types of coverage offered include business crime, business automobile, boiler and machinery, marine and farm.

BREAKING DOWN 'Commercial Multiple Peril Policy'

Commercial multiple peril insurance is the most popular type of commercial package insurance policies in the U.S. property and casualty insurance market. These policies are sold by property and casualty insurers to businesses of various types. They typically combine several property and general liability coverages under a single policy, creating a convenience in coverage for the insured. It is often available for a discount. It is rated by applying factors known as package modifications at the end of the rating process. This permits each coverage in the package to be analyzed in combination with results from the monoline coverage.

Many farmers and ranchers also purchase these policies for multiple forms of protection against incidents such as farm fires. A popular type of this type of multiple peril coverage is multiple-peril crop insurance coverage (MPCI). MPCI is a bundle of different policy options that covers loss of crop yields from drought, flood, excessive moisture, and all other natural causes. This type of coverage now allows for a combination of yield protection and price protection to further protect farmers from financial loss. Multiple-peril crop insurance is actually a product of a government partnership and 19 private insurance companies. In essence, the United States Department of Agriculture Risk Management Agency oversees the issuance of MPCIs, along with mandating what rates can be charged and what kinds of crops are automatically covered in different parts of the country. Only the select group of insurance companies that are allowed to sell MPCIs may handle the reinsurance and writing of the policies. They also adjust and process claims.

Types of Coverages Available in Commercial Multiple Peril Insurance

Commercial multiple peril insurance polices can include a wide range of insurance coverages that apply to a variety of business types. These include:

  • General Liability
  • Product Liability
  • Medical Expenses
  • Building
  • Business and Personal Property
  • Equipment Breakdown Protection Coverage
  • Business Income and Extra Expense
  • Bailee Coverage
  • Commercial Crime
  • Employee Theft and Forgery
  • Spoilage Coverage
  • Liquor Liability Coverage
  • Hired Auto and Non-owned Auto Liability
  • Barber Shops and Hair Salons Professional Liability
  • Pharmacists/Druggists
  • Beauty Salons Professional Liability
  • Directors and Officers Liability
  • Ordinance or Law Coverage
  • Utility Services
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