Understanding Wrap-Up Insurance Programs
Whether you are a property owner, general contractor, or subcontractor, it’s important that you understand wrap-up insurance programs. You should know when to consider one, what they insure, and how they affect the project. All of this knowledge helps you to ensure that your construction or renovation project is well protected.
What is a wrap-up insurance program?
Insurance offers two types of wrap-up programs: Owner Controlled Insurance Programs (OCIPs) and Contractor Controlled Insurance Programs (CCIPs). In an OCIP, the property owner sponsors and controls the insurance program. In a CCIP, the general contractor sponsors and controls the program. Aside from that, OCIPs and CCIPs are largely similar.
Wrap-up programs are several insurance policies wrapped up into one insurance program. They can be used with large single-site projects as well as multi-site projects.
What do wrap-up programs insure?
Programs vary widely regarding which policies are ‘wrapped.’ However, as a general rule, these programs insure general liability exposure for claims arising from the construction project at the construction site during the policy period. Wrap-up programs often cover damages arising after construction is completed through completed operations coverage. Completed operations insures bodily injury or property damage claims that happen after the completion of a project but arise from the project itself.
Generally, liability occurring away from the project site is not covered. Similarly, tools and equipment that are not at the construction site are not covered. To avoid this gap, Builder’s Risk and Inland Marine coverage can be added to the program and is well worth the coverage.
What are potential issues?
Since a wrap-up program can involve several insurance policies, the sponsor may benefit from hiring someone to help design/administrate the program. While this can be costly, the policyholder and project can benefit from undivided attention to make sure that the contractors and subcontractors are aware that the project is covered under a wrap-up program.
Which type of wrap-up insurance is right for your project? It depends! To have an expert assess your unique situation and help you decide whether it would be best served by OCIP Insurance or CCIP Insurance coverage, contact Nahai Insurance Services. Our staff of experienced wrap policy professionals can help you best protect your upcoming project.