Owners, Developers, Construction managers and General Contractors face a host of insurance uncertainties with every project. While no program can eliminate every uncertainty, a Controlled Insurance Program (CIP), commonly known as a “Wrap-Up,” can improve coverage while mitigating the total cost of insurance and risk transfer. Many Wrap-Ups today are commonly designed to include only General Liability and Excess Liability, but other project-specific coverages include Builder’s Risk, Pollution, and Professional Liability. Without a Wrap-Up, each contractor working on a project procures its own insurance which they build into their bids. With a Wrap-Up, the sponsor negotiates and purchases coverage for all eligible contractors working on the project. The credit is equivalent to the conventional cost of the coverages the separate parties would have been required to purchase in the traditional marketplace.
Why should a Wrap-Up Program be used?
The three C’s come into play when determining why this program would be beneficial: coverage, control, and cost savings.
In terms of coverage, these programs offer more specified protections with broader limits, and provide quality protection for all enrolled participants.
- Completed Operations Coverage thru Statute of Repose
- Reduction in Litigation, “No Finger Pointing”, One Insurance Carrier
According to Wrap-Up Solutions, the following is applicable of control for these programs:
- Assurance in the Quality & Stability of Insurance Carriers
- One Risk Management System including Loss Control & Claims Management
- Enhanced Protection of the Program Sponsor’s Assets
Project-specific coverages can be provided in these programs, which is especially beneficial to the large-scale operations. In addition, the article states that the following are offered through wrap-up programs:
- Elimination of the Duplication and Gaps in insurance coverage
Benefits of Wrap-Ups
Without this specified coverage, each contractor would have to factor in their individual insurance costs into the project bid. However, with a wrap-up policy, each contractor and subcontractor would be covered, dependent on the scope and cost of the overall project. This streamlined process is a simpler solution with less room for exposures (such as underinsured and coverage gaps) and less gray areas for both parties.
Types of Wrap-Up Programs
Through a GL only approach, the sponsor and all enrolled (sub)contractors benefit from the wrap up scope, extent of coverage, and named insured rights, all while significantly reducing the risk of coverage erosion and/or exclusionary terms that commonly arise with traditional annual policies. GL only Wraps are structured with a primary 1M / 2M / 2M or 2M / 4M / 4M with 100M in excess limits attaching over the primary.
About Genesee General
At Genesee General, we strive to provide quality insurance solutions for the construction sector. Our longstanding expertise has allowed us to successfully serve your clients for over three decades. For more information about our products, we invite you to contact us today at (800) 282- 8755.