Wrap-Up Insurance
Candlefocus EditorWrap-up insurance is similar to a single-project insurance policy created by the project owner, designed to provide liability protection to the contractor and subcontractors on the project. It is important to note that while wrap-up insurance can provide coverage to the contractor and subcontractors, it is not intended to replace the insurance coverage that each individual party is responsible for obtaining.
One important type of wrap-up insurance is an owner-controlled insurance program (OCIP). In this type of program, the project owner purchases insurance coverage that covers the contractor's and subcontractors' potential liability associated with the construction project. The coverage provided by an OCIP policy is usually extensive and includes general liability, property damage, workers' compensation, and sometimes other types of coverage.
On the other hand, there is contractor-controlled insurance program (CCIP). This differs from an OCIP in that it is purchased by a contractor or consortium of contractors to cover any liability for all parties involved in the project. This type of wrap-up insurance may include coverage for the contractor’s own operations as well.
Wrap-up insurance can be beneficial for both the contractor and the owner of the project in many ways. For the owner of the project, it can provide peace of mind in the form of fewer litigations due to having better protection when potential liabilities arise. For the contractor, wrap-up insurance alleviates the need to coordinate insurance among subcontractors and has fewer claim disputes due to having one central insurance provider.
To conclude, wrap-up insurance is an important type of liability policy that can provide comprehensive insurance protection to all parties involved in a construction project. It is beneficial for both the owners and contractors, helping to mitigate the potential of litigations and safeguard the finances of all involved. As the construction industry continues to be faced with more risks and uncertainties, wrap-up insurance is an excellent way to protect contractors and subcontractors from losses on a construction project.