Your Questions Answered
- A Shared Risk Management Program
As defined by International Risk Management Institute (IRMI):
“A wrap up or a controlled/consolidated insurance program is a centrally procured and managed insurance and risk control program implemented for a construction project or a series of projects.”
Traditional Wrap Ups (Workers' Compensation and General Liability)
Single Program
- Construction values of $100 million + / –
Rolling Program
- Multiple projects/single site $125 million + / – over 2-3 years
- Multiple projects/different sites $150 million + / –
- Minimum size $20 million + / –
General Liability Only Wrap Ups
Most often provided for residential construction exposures.
Programs
- Construction values of $5 million +/-
- Multiple prospect programs are available
Always Consider the 3 C's
Coverage
Wrap up programs can:
- Provide a broader scope of coverage when compared to traditional insurance methods
- Ensure dedicated and adequate limits for the project
- Facilitate and support Minority/Women Business Enterprise (MBE/WBE) participation
- Provide dedicated and focused insurance protection for all enrolled participants
Control
Wrap up programs can offer:
- Completed operations coverage through statute of repose
- Reduction in litigation, “no finger pointing”, one insurance carrier
- 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
Cost Savings
Wrap up programs should provide:
- Economies of scale in the purchase of project specific insurance
- Elimination of the duplication and gaps in insurance coverage
- Financial savings as a result of a favorable loss experience
Savings typically range from .25 to 1.5 percent of the project’s hard costs.
- Program design
- Administration systems/processes
- Loss control management
- Claims management
- Communication
The cornerstone to a successful wrap up is always communicating.
It is the responsibility of the Wrap Up Insurance Solutions team to deliver to the program sponsor and all enrolled participants the services necessary to achieve the expected goals of reducing the overall cost of construction, providing a safe work environment for all employees and protect the general public. Our unique team of professionals has the experience necessary to meet the goals of your wrap up program.
TRADITIONAL WRAP UPS
Workers’ compensation, general liability, and excess liability are included.
Other Coverages to Consider:
- Builders’ risk
- A&E professional liability
- Contractors pollution
- Pollution legal liability
- Surety subcontractor default insurance
GENERAL LIABILITY ONLY WRAP UPS
General liability and excess liability included.
Coverages Typically Excluded:
- Automobile liability
- Contractor’s equipment
- A&E’s professional negligence
The Wrap Up Insurance Solutions team will work with our program sponsor to make sure all construction related exposures are reviewed and/or addressed for each project.
NOTE:
- All wrap up insurance limits are project specific.
- Additional excess liability limits can be added on a project specific basis as required.
- Each project will be reviewed individually to make sure all insurance related concerns, exposures, and needs are appropriately evaluated and addressed.
- Has the owner ever participated in a wrap up program?
- If it’s NOT in the Contract …… lt’s NOT going to happen!
- Wrap up enrollment is mandatory
- Safety requirements (i.e. 100% fall protection – 6 ft.)
- Drug testing programs
- Early return-to-work programs
- Who is covered by the wrap up?
- Enrolled contractors
- Excluded contractors
- Vendors, suppliers, delivery persons and small contracts are generally excluded
- Should a maintenance deductible be required of an “enrolled contractor”?
- General liability claims
- Builders risk claims
- What are the contractor insurance cost bidding requirements?
- Bid with (provide “deduct alternate”)
- Bid with (broker/administrator will calculate)
- Bid without (provide “add alternate”)
- How are the contractor insurance credits to be calculated?
- Rates time of award/mobilization
- Actual rates throughout life of project
- Profit and overhead credits
- How are “change orders” handled?
- Remember the motivation for implementing a wrap up … “The 3 C’s”
- Coverage
- Control
- Cost Savings
- How are my wrap up program insurance costs to be calculated at close-out?
- Payroll
- Construction value
- How are my claims being handled?
- Cradle-to-grave
- Cost plus
The wrap up does NOT provide coverage to everyone at a project site
Typical excluded parties are:
- Vendors, suppliers, and delivery personnel
- Fabrication performed away from the project site
- Design professionals (architects & engineers) E&O
- Pollution, abatement or asbestos work
- At sponsor’s discretion, smaller contracts (e.g. $10,000 or less)