As a reputable business owner, you always want to protect the people involved with your projects (especially your client). However, organizing policies that cover your clients, employees, contractors and vendors can literally cause you night terrors.
A Wrap-Up policy is a simple way to consolidate coverage on all of your general liability or workers’ compensation risks involved with large-scale construction projects. This type of policy is often referred to as an Owner Controlled Insurance Policy or Contractor Controlled Insurance Policy (OCIP or CCIP).
A Wrap-Up policy allows you to run a safe and cooperative construction site, where everyone is protected. If an injury were to happen, for example, there is no need to allocate blame because everyone is protected under the same policy. This also provides for a speedy claims process.
Knowing that the risks of your entire project are covered lets you focus on getting the work done right.
Are there particular terms that you write for this type of policy?
A Wrap-Up Policy typically protects you for completed operations (construction defect) up to the statute of repose, which in California for example, is 10 years. Most states have statutes of repose specific to construction projects. These are necessary to prohibit claims for defects after a certain number of years have gone by.
Can a Wrap-Up Policy include Worker’s Compensation?
Our recommendation is to always include Workers’ Compensation coverage in your policy to ensure that all job site injuries are covered. Not all Wrap-Up policies include workers’ compensation coverage, which is why it is important to build your policy with one of our agents to cover every potential exposure to risk.
Is it up to the contractor or the project owner to secure the right insurance?
It depends. For most projects, like building for homeowner and condo associations, insurance is taken out by the developer or owner making it an OCIP. In government projects, and certain large commercial projects like shopping malls, the policy is taken out by the general contractor making it a CCIP. Remember, the owner is putting a lot of faith in your operation to adhere to safety standards, and a show of good faith is to procure the correct insurance for as long as it takes to ensure that construction defects are not going to occur, even after the owner and general contractor have concluded their business relationship.