Wrap-up insurance programs are blanket coverage liability policies that protect the owners, developers, contractors and subcontractors involved in large-scale, high-cost construction projects. There are two types of wrap-up policies: owner-controlled insurance programs and contractor-controlled insurance programs. Both of these eliminate the need for the parties involved in the project to obtain individual liability insurance. However, there are some differences between the two.
As the name suggests, this insurance program is set up by the owner or developer of a construction project. Typically, an OCIP package contains:
- Employer’s liability
- Commercial general liability
- Excess liability
- Worker’s compensation
One of the primary advantages of OCIP vs CCIP for owners is that it allows them to have complete control over the insurance costs for a particular project. It can also lower their overall expenditure by eliminating the individual insurance offsets included in subcontractor quotes.
The coverage provided by a CCIP package is usually very similar to that of an OCIP. Though, this type of wrap-up insurance is controlled by the contractor for the project. One of the benefits for contractors is that the package allows them to widen their pool of subcontractors to include those who might not otherwise be able to afford the individual policy needed for a large and costly project.
Whether you are an owner or a contractor, assuming the responsibility for the liabilities involved in a large undertaking brings many risks. Therefore, before embarking on a partnership, all parties should have an honest discussion concerning the individual advantages and disadvantages of these programs.