Construction Wrap Insurance

A wrap-is an insurance program under which a project owner provides insurance coverage to all the contractors and subcontractors on a project rather than requiring each of them to use their own insurance for coverage.

The main reason that these programs recently became prevalent in the construction industry is because of the refusal of insurance carriers to provide insurance for multi-family residential projects performed by contractors. After the legal community started a trend toward class action lawsuits for construction defects on multi-family residential projects, insurers now no longer want the exposure. The solution is a wrap-up.

There are two types of wrap-up programs, an Owner-Controlled Insurance Program (OCIP) under which the owner is the sponsor and a contractor-controlled insurance program (CCIP) under which the general contractor is the sponsor. OCIPs comprise about 90% of the wrap-up programs currently being performed in the U.S.

The two programs are basically the same. The main difference is sponsorship (owner vs. contractor). In either case, it is critical that the wrap-up is structured with a partner that has collaboration in mind. That is where Druml Group comes in.

We make the perfect partner for any wrap-up project. Wrap-up administration is the critical component of successful program implementation and our construction knowledge and engineering-like thoroughness means that we know how to effectively implement the program. Here are some of the key program administration functions we perform or coordinate:

  • At the onset of a construction project, we make sure that the GC understands his or her role in the wrap-up program management. As part of the procurement process, GC’s typically has responsibility for the one of the most important elements of the warp-up’s financial success; negotiating insurance credits with subcontractors. We assist in the negotiation and assure that the subcontractor bids properly reflect the insurance credits.
  • To maximize owner and GC support, we make sure wrap-up procedures are compatible with the owner’s and GC’s existing practices. We carefully assess and adjust design and implementation of the program to coincide with the owner’s and GC’s procurement, accounting, safety, and risk management procedures in order to minimize any changes imposed by wrap-up implementation.
  • To make sure the program is a success, we make sure every contractor and subcontractor understands and complies with all wrap-up procedures. We provide manuals that are easy-to-read and understand including pre bid & bid deduct forms, procedures manual, safety & loss control manual, claims procedure & reporting forms and pre mobilization documentation.
  • To minimize insurance losses, we continually reinforce a proactive safety culture. And then of course, we monitor the program to ensure administrative procedures are followed and evaluate individual contractor/subcontractor safety performance.

As you can see, we thoroughly handle the requirements of a wrap-up program, but that’s not all. We are experts at arranging the best insurance coverage at the most competitive price, and we look forward to doing so on your next wrap-up program!

Please call or e-mail us today so we can provide you professional OCIP/CCIP administration and the best and most competitive insurance available.