Arkansas Insurance Adjuster Practice Exam

Which of the following statements regarding Commercial Package Policies (CPP) is TRUE?

1. A CPP is an elective-based policy.

2. A CPP is an example of a monoline policy.

3. A CPP requires a separate declarations page for each coverage.

4. Workers' compensation insurance is automatically included with a CPP.

The correct answer is: A CPP is an elective-based policy.

A Commercial Package Policy (CPP) is indeed an elective-based policy, which means that it allows businesses to customize their coverage by choosing specific types of insurance to include in the policy based on their needs. This flexibility provides businesses with the opportunity to tailor their insurance coverage to suit their unique requirements. While option B refers to monoline policies, which provide coverage for a single line of insurance, CPPs are different as they can combine various coverages into a single policy. Regarding option C, a CPP typically includes a single declarations page that lists all the coverages included in the policy for ease of reference. Finally, option D is incorrect as Workers' Compensation insurance is not automatically included in a CPP; it is usually purchased separately as a standalone policy.