Overview
Wrap-up (or "Wrap") construction insurance bundles multiple coverages for a single project into one master policy that covers the owner, the general contractor, and participating subcontractors.
There are two common varieties: owner-controlled insurance programs (OCIP) and contractor-controlled insurance programs (CCIP); both aim to reduce overlap, raise limits, and create consistent coverage and claims handling across all parties.
Because wrap policies can be tailored for industry specifics and unusual exposures, some project owners use specialized forms for sectors such as entertainment productions — for examples see Entertainment Wrap Ups.
Key takeaways
- Wrap insurance centralizes project coverages to reduce gaps and inconsistent limits.
- OCIP and CCIP shift purchasing responsibility to one party but distribute costs among participants.
- Wrap programs can lower litigation risks between contractors by removing competing coverages.
- These policies are often manuscript forms and should be reviewed carefully for exclusions and limits.
How it works
A wrap policy acts as the primary policy for project risks rather than relying on each subcontractor’s separate insurance.
The sponsor (owner or lead contractor) purchases a master policy that names covered parties and sets uniform limits, endorsements, and claims procedures for the duration of the project.
Because every project is different, insurers usually write these as customized policies; for information on broader construction insurance choices that can interact with a wrap program, see Insurance Options for Construction Projects.
What it may cover (and what it may not)
Typical elements included in many wrap programs are commercial general liability, excess/umbrella limits, and builders risk property coverage that protects materials and structures during construction.
Some wraps also consolidate workers’ compensation and employer liability, but in other cases workers’ comp remains maintained by individual employers depending on state rules and project design.
Common exclusions or limits to watch for include professional design errors, pollution not arising from construction operations, and damages subject to existing warranties; for projects with unique exposures, specialized wrap products exist and can be tailored — for a project-focused example see Builders Risk Insurance and Workers Compensation Insurance.
Common mistakes to avoid
- Assuming all subcontractors are automatically covered — confirm enrollment procedures and effective dates.
- Overlooking contractual indemnity and how it interacts with the wrap policy’s limits and endorsements.
- Failing to coordinate policy periods and notice provisions with construction schedules and startup dates.
- Neglecting to document loss allocation and claims handling responsibilities in writing.
Questions to ask an agent
- Which parties will be named insureds, and how are subcontractors added or removed?
- What are the policy limits for general liability, builders risk, and any umbrella/excess layers?
- How does the program handle claims involving multiple contractors or cross-claims?
- Are there cost-allocation methods or premium credits that affect subcontractor billing?
Next steps
Review the project contract and insurance requirements early so you can compare wrap options with traditional separate policies.
Request sample policy forms, a summary of enrollments, and the insurer’s claims handling procedures before committing to a program.
If you want to convert a discussion into a formal quote or policy review, talk to an agent who can assess whether a wrap program is appropriate for your project.
Frequently Asked Questions
Who pays for a wrap-up insurance program?
Typically the owner or general contractor purchases the master policy and allocates costs to participants through contract pricing or billing adjustments.
Does a wrap policy eliminate subcontractor insurance obligations?
A wrap often replaces the need for certain subcontractor policies, but contract language should clearly state which coverages are required or waived.
Will a wrap-up reduce litigation between contractors?
Yes; by providing a single insurer and unified coverage, wraps can minimize coverage disputes and duplicate litigation among project parties.
Are wrap policies more expensive than separate policies?
Wraps can carry higher upfront costs for the sponsor, but they may lower total project cost through consolidated limits, streamlined claims handling, and reduced litigation.