Are you trying to decide if you should buy a wrap insurance policy? Here’s what you need to know.
If you have a construction project coming up, you might be considering wrap-up insurance. With this kind of coverage, you, your contractors, and your subcontractors are all protected under a single policy. Is that the best way to go? Here are the pros and cons of a wrap insurance policy so you can decide if this coverage is right for your construction needs.
With wrap coverage, your general liability, excess liability, workers’ comp, builder’s risk, and more can be contained in a single policy. You don’t have to worry about getting a bunch of different policies, and you don’t have to coordinate with your contractors and subcontractors to make sure everyone is protected. Also, wrap insurance policies give you the freedom to choose the best party to hold the coverage. You can either choose an owner controlled insurance program (OCIP) or contractor controlled insurance program (CCIP).
A wrap insurance policy could bring you issues, depending on your indemnification clause. It’s possible that your construction contracts’ indemnity provisions are broader that the coverage laid out by your wrap policy. For example, this could happen if your contractor is held liable for poor employment practices with subcontractors, but your wrap-up policy doesn’t contain employment practices liability insurance. If you do choose a wrap insurance policy, it’s important you analyze indemnity language in your existing contracts and adequately cover those obligations in your policy.
Clearly, there’s a lot to be considered before buying a wrap insurance policy. If you’d like to talk to an expert about how this kind of policy could be used to protect your next project, contact Nahai Insurance Services. We specialize in this type of construction coverage and can advise you on the best way to tailor your wrap policy for your unique needs.