Legal Definitions - compound policy

A compound policy is a type of insurance policy that covers multiple properties or risks under a single agreement. It is also known as a blanket policy. This type of policy is useful for businesses or individuals who have multiple properties or assets that need to be insured.

For example, a business owner may have several buildings, vehicles, and equipment that need to be insured. Instead of purchasing separate policies for each item, the business owner can opt for a compound policy that covers all the assets under one agreement.

Another example is a bailee policy, which is a type of compound policy that covers goods in a bailee's possession without specifically describing the covered goods. This type of policy is useful for businesses that handle goods belonging to others, such as a dry cleaner or a storage facility.