The Oklahoma Contractor’s Guide to Commercial Package Policy Insurance

Introduction: Your Guide to Contractor Package Insurance

If you’re a contractor in Oklahoma, you know insurance is a must-have. You probably started with a basic general liability policy to get your license or land your first gig. But as your business grows that simple policy might not be enough to protect everything you’ve built.

That’s where a Commercial Package Policy, or CPP, comes in. Think of it as a customizable toolbox for your insurance. Instead of buying a bunch of separate policies, a CPP bundles the specific coverages you need into one streamlined package.

This guide will break down the Commercial Package Policy. We’ll cover what it includes, why it’s a game-changer for Oklahoma contractors, and how it helps you stay protected on the job site and beyond.

Why It Matters for Contractors

On any given day, a job site is full of risks. A simple accident can turn into a financial nightmare that puts your business and personal assets on the line. The "it won't happen to me" mindset is a gamble you can't afford to take.

Consider a few real-world scenarios:

A project is done, but the risk isn't. Months after you finish a job, your work is blamed for causing major property damage, like an electrical fire or a plumbing failure that floods two floors of an office building. This is called "products-completed operations" risk, and a lawsuit could surface long after you’ve been paid.
Your tools are stolen from a job site. Your work trailer, filled with thousands of dollars in essential equipment, gets stolen overnight. A standard property policy won't cover it, leaving you to foot the bill to replace everything.
A simple mistake causes a big injury. A tool dropped from a roof injures a pedestrian, or a client trips over a cord on your job site. The resulting medical bills and legal fees can be astronomical.

These aren't just hypotheticals; they are the kinds of everyday risks that can shut down a business without the right protection. A comprehensive insurance plan is your best defense against the unexpected.

What It Covers and What It Doesn’t

A Commercial Package Policy is powerful because it’s flexible. You start with a solid foundation and then add the specific protections your business needs.

Core Coverages in a CPP

Every CPP is built on two key pillars:

Commercial General Liability (CGL): This is the foundation of your protection. It covers you if your business operations cause bodily injury or property damage to a third party (like a client, vendor, or member of the public). It helps pay for medical bills, repair costs, and the legal fees to defend your business in a lawsuit.
Commercial Property: This protects the physical assets you own or lease for your business, like your workshop, office, or storage facility. It covers the building itself and the contents inside, such as your desks, computers, and any tools or materials stored at that location.

Customizing Your Policy with Add-Ons

The real value of a CPP for a contractor is the ability to add specialized coverages for the mobile nature of your work.

Inland Marine (Tools & Equipment Floater): This is one of the most important and often overlooked coverages. Your standard property policy does not cover your tools and equipment once they leave your shop. Inland Marine insurance protects your gear while it’s in your truck, at a job site, or stored somewhere temporarily.
Commercial Auto Insurance: A personal auto policy won't cover accidents that happen while you're driving for business. Commercial Auto covers your work trucks, vans, and trailers for liability and physical damage.
Business Interruption: If a fire or tornado destroys your workshop and you’re forced to shut down, this coverage helps replace lost income and cover ongoing expenses like payroll until you’re back up and running.
Commercial Umbrella Liability: This adds an extra layer of liability protection over your other policies. If a major lawsuit exceeds the limits of your CGL or auto policy, the umbrella policy kicks in to cover the rest, protecting your business assets.

What’s NOT in the Box

Even a great CPP doesn’t cover everything. You’ll need to purchase these essential policies separately:

Workers' Compensation: This is a big one. A CPP never includes Workers' Comp. If you have even one employee in Oklahoma, you are legally required to have a separate Workers' Comp policy to cover their medical bills and lost wages from a work-related injury.
Professional Liability (Errors & Omissions): General liability covers property damage and injuries. Professional liability covers a client’s financial losses due to a mistake in your professional services, like a design flaw or faulty advice. This is especially important for design-build contractors.

CPP vs. Business Owner's Policy (BOP)

You might have also heard of a Business Owner's Policy, or BOP. While it also bundles coverages, it’s designed for different types of businesses.

A Business Owner's Policy (BOP) is a simple, pre-packaged deal for small, low-risk businesses like a small retail shop or office. It’s less flexible and often has lower coverage limits. Many contractors are not eligible for a BOP because of the higher risks involved in construction.
A Commercial Package Policy (CPP) is built for businesses with more complex or higher risks, which perfectly describes contracting. Its main advantage is customization. You can pick and choose coverages, set higher liability limits to meet contract demands, and tailor the policy to fit your exact needs.

For a growing contractor, a CPP is the smarter, more scalable choice that can adapt as you take on bigger and better jobs.

Who Needs It and When

In Oklahoma, insurance requirements can feel like a moving target, with different rules at the state and city levels.

State and Local Licensing Rules

The Oklahoma Construction Industries Board (CIB) sets the rules for several trades.

Electrical, Mechanical (HVAC), and Plumbing Contractors: To get and keep your state license, you need proof of at least $50,000 in general liability insurance and a $5,000 surety bond.
Roofing Contractors: The liability requirements are much higher: $500,000 for residential work and $1,000,000 for commercial work.
General Contractors: Oklahoma has no statewide license for general contractors. However, cities like Oklahoma City and Tulsa have their own registration rules, which include providing proof of both general liability and workers' compensation insurance.

Why State Minimums Aren’t Enough

Here’s the most important thing to remember: the insurance amount required for your license is just the bare minimum to operate legally. It is not enough to properly protect your business.

The real world of contracting runs on different rules, set by your clients and general contractors. To win bids for most commercial or large residential projects, you will almost always be contractually required to carry liability limits of $1,000,000 per occurrence and $2,000,000 in aggregate.

If you only carry the state minimum, you won’t be able to compete for the bigger, more profitable jobs. Think of proper insurance not as an expense, but as a tool that qualifies you for better work and protects your future.

Oklahoma-Specific Insights

Running a business in Oklahoma comes with its own unique set of challenges and rules.

The Legal Clock is Ticking: In Oklahoma, the statute of limitations for filing a lawsuit over property damage is two years from when the damage happened or was discovered. This is why you need continuous coverage. A client could discover a slow leak from a pipe you installed 18 months ago and still have time to sue you. If you dropped your coverage after the job, you’d be on your own.
A Warning for Roofers: The Oklahoma Insurance Department has strict rules about negotiating insurance claims. A roofer can provide an estimate and point out damage to an adjuster, but it is illegal to act as an unlicensed public adjuster by negotiating a claim settlement on behalf of a homeowner. This can lead to big fines, so it’s important to know where the line is.
Weathering the Oklahoma Storm: Tornadoes, hail, and high winds are a fact of life here. These events can destroy materials on a job site or damage your workshop. A CPP can include Builder's Risk insurance to cover a project while it’s under construction and robust Commercial Property coverage to protect your own home base.

Mistakes to Avoid

Relying on State Minimums: Assuming the $50,000 liability requirement for your license is enough protection. It leaves you underinsured and unable to qualify for better jobs.
Forgetting to Insure Your Tools Off-Site: Thinking your tools are covered by your property policy when they're in your truck or at a job site. They aren't, unless you have Inland Marine coverage.
Dropping Coverage After a Job: Canceling your liability policy to save money after a big project is finished, exposing you to claims for completed work that may pop up years later.
Not Vetting Subcontractor Insurance: If you hire a sub who is uninsured and they cause an accident, the liability can fall on you. Always get a certificate of insurance from them.
Choosing a Policy on Price Alone: The cheapest policy often has hidden exclusions that leave you unprotected when you actually need to file a claim.

Frequently Asked Questions

Do I still need Workers' Comp if I have a CPP?

Yes, absolutely. A CPP never includes Workers' Compensation. It’s a separate policy that is required by law in Oklahoma if you have employees.

How much does a CPP cost?

The price varies widely. It depends on factors like your specific trade (roofing is riskier than painting), your annual revenue, number of employees, and your claims history. The types of coverage and limits you choose will also heavily influence the final cost.

Can I adjust my CPP as my business grows?

Yes, and that’s a huge benefit. A CPP is designed to be flexible. You can easily increase your coverage limits, add vehicles, or include new protections as you take on bigger projects.

Key Takeaways

A Commercial Package Policy (CPP) is a flexible insurance solution that’s ideal for growing Oklahoma contractors.
Contract requirements, not state minimums, dictate the level of insurance you really need, which is typically $1 million per occurrence.
You must have Inland Marine coverage to protect your tools and equipment when they are not at your primary business location.
Your liability for a project continues long after it’s done. Don’t get caught without "products-completed operations" coverage.
A CPP does not include Workers' Comp. That’s a separate, mandatory policy.

The best next step is to have a straightforward conversation with your insurance agent. Ask them to confirm you have the right coverages for your tools, your completed work, and the contract limits you need to grow your business. Getting your insurance right isn't just about compliance; it's about building a strong, resilient business that can handle whatever the job throws at it.