Protecting contractors and subcontractors working on large projects for a variety of risks.
A wrap-up changes the way liability and workers compensation insurance is procured for large construction projects. Traditionally subcontractors provide their own insurance as required by the owner for a particular project. In addition, the owner may purchase a contingency policy to protect their own interests. This is also accomplished with other “risk transfer” methods such as hold harmless agreements and additional insured provisions on behalf of the owner.
There are a lot of factors that come into play when determining why this program is beneficial and how it is used.
Coverage
In terms of coverage, wrap up programs offer more specified protections with broader limits, and provide quality protection for all enrolled participants. Wrap-up insurance offers a number of unique coverage endorsements that are rarely found on an individual General Liability policy for a contractor. The inclusion coverage-enhancing endorsements may entice someone with a large construction project to spend more up-front money on a wrap-up with more secure coverage. Other advantages of wrap-up policies are the coordinated and concise claims handling the reduction of the number of competing interests.
Control Options
Wrap-up insurance allows the project owner to isolate construction risks from core operational risks. The owner can also ensure there are no gaps in general liability or workers’ compensation coverage and create a centralized safety program. This type of policy eliminated duplication in coverage, too. When contractors and subcontractors purchase individual policies, coverage generally overlaps because they have to ensure themselves for the same accidents. This can lead to litigation between insurance companies in the event of a claim.
Cost Savings
Because you’re basically buying insurance in bulk, you can get coverage at a lower cost. This means the premium for the wrap-up insurance policy will be lower than the total of premiums purchased by individual contractors. Project-specific coverage can be provided in this program, which is especially beneficial to the large-scale operations who want to control coverage and their budget.
When it comes to your construction project, ensure that you’re in great hands. Securing the best construction insurance for your projects can be complicated, yet it’s critical. Contact a team representative at Nahai Insurance Services to discuss the most reliable insurance solutions for you and your project.
