What Is Wrap-up Insurance for Construction?

February 6, 2024
5 min
What Is Wrap-up Insurance for Construction?

Many construction projects, large or small, tend to face multiple risks. The risks range from work accidents to injuries and property damage that lead to liability claims. The intent of wrap-up insurance is to provide peace of mind that everyone on the project is insured. Think of wrap-up insurance as a blanket coverage for all contractors on the job. 

What is wrap-up insurance?

Wrap-up insurance is a comprehensive liability insurance policy specifically made for construction projects that protect all contractors and subcontractors working on large-scale projects. There are typically two types of wrap-up insurance, owner-controlled and contractor-controlled insurance.

General liability insurance coverage generally includes attorney fees, court costs, settlements, and judgments for covered claims made during the coverage period, and typically including completed operations.

Two types of wrap-up insurance

Owner-controlled wrap-up insurance

Owner-controlled wrap-up insurance (OCIP) is initiated by the project’s owner and covers all contractors and subcontractors. This form of insurance typically includes general liability coverage, workers’ compensation and excess liability coverage. The idea behind owner-controlled wrap-up insurance is to protect against various risks associated with construction projects. 

Contractor-controlled wrap-up insurance

In similarity to owner-controlled wrap-up insurance, contractor-controlled wrap-up insurance (CCIP) is controlled by the general contractor. This insurance basically covers all subcontractors under the general contractor.

Why do we need wrap-up insurance? The benefits 

  • Provide a comprehensive support in risk management
  • Typically cost efficient
  • Provides a broader coverage than most providers
  • Drastically improves safety and loss prevention
  • Streamlines the claims process
  • Helps with compliance and contractor qualifications
  • Attractive to subcontractors
  • Helps improve project budgeting - predictable costs
  • Helps transfer risk

Cost of not having wrap-up insurance

The response to not having wrap-up insurance is very costly. Let's take a look at what are the negatives to not having wrap-up insurance.

  • Higher premiums
  • Fragmented coverage
  • Higher admin burdens
  • Higher safety risks and liability
  • Difficult managing claims
  • Lack of standardization and inconsistencies
  • Legal and litigation risks

How do I attain wrap-up insurance?

Securing wrap-up insurance in construction consists of multiple processes but totally worth it. Here’s how to tell you need wrap-up insurance and the processes attaining it. 

Step 1: Evaluate project and scope

Step 2: Determine between OCIP and CCIP

Step 3: Engage with Insurance Broker or Consultant

Step 4: Review program and coverage needs

Step 5: Market program to insurers (RFP Process)

Step 6: Compare and negotiate

Step 7: Implement 

Step 8: Administer and gain oversight

Step 9: Claim management 

Step 10: Final audits/coverage expansions

Supporting wrap-up insurance with Kwant

Attaining wrap-up insurance is a smart move for many owners and general contractors when working on large-scale projects. It helps provide coverage, keeping everyone safe and insured while they work. 

Today, many owners and contractors are utilizing construction safety technology solutions like Kwant to support lowering insurance premiums under difference insurances like wrap-up insurance. Learn how Kwant’s safety smart wearables and workforce management solutions help support construction insurance and compliance. 

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