Wrap-up liability insurance is a specialized policy commonly utilized for large construction projects. It aims to protect contractors and subcontractors by providing coverage for various liability risks. This insurance is often implemented when individual Commercial General Liability (CGL) policies held by contractors do not offer adequate coverage.
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What is Wrap Up Liability InsuranceWrap-up liability insurance is a vital risk management tool for large construction projects. It provides comprehensive liability coverage, filling the gaps left by individual CGL policies. While it offers advantages such as consolidated coverage and broader protection, it can be costly and may lead to duplicate coverage.
Consideration of project-specific needs is crucial before opting for wrap-up liability insurance. Wrap-up insurance for any construction projects is a significant way to protect against property damage or bodily injury to third party individuals or entities that could occur during a construction project.
Construction activities are being done almost everywhere. When it's happening in and around highly-populated areas, it is important to know how wrap-up liability insurance works for construction projects.
Working with Multi Parties
Major Difference Between Wrap-Up Insurance and Builders Risk Insurance
Wrap Up Insurance protect against
Advantage of Wrap Up Insurance
The advantage of having wrap-up liability insurance is that it consolidates the coverage for all contractors and subcontractors into a single policy, which simplifies the insurance process and reduces administrative burden. It provides broader coverage limits than individual CGL policies, ensuring that all parties have adequate protection. Additionally, it helps to streamline the claims process and facilitates better coordination between all parties involved in the project.
- Coverage uniformity; the owner and all contractors are insured in one policy by one insurance company
- Lower cost (compared to when each contractor obtained their own insurance)
- Easier administration of the insurance requirements as the general contractor doesn't need to monitor all subcontractors to guarantee their separate policies conform and remain in force
- Guarantees coverage will stay in place for the project for the completed operations period
- Avoids disputes between policies and insurance companies when more than one contractor is involved in a loss
Disadvantage of Wrap Up Insurance
- Coverage not as broad as standard CGL - Exclude damage in completed operation.
- Contractors still require CGL coverage to insure their other operation and past work.
- Contractor may have duplicate coverage if already has own CGL.
Frequently Asked Questions About Construction Wrap Up Insurance
Why is wrap-up liability insurance necessary in construction projects?
Why is wrap-up liability insurance important for large construction projects?
How does wrap-up liability insurance benefit contractors and subcontractors?
Who typically purchases wrap-up liability insurance?
Can wrap-up liability insurance help protect a company's reputation?
Owner-Controlled insurance Or Contractor Controlled Insurance
Meanwhile, the general contractor may use a contractor-controlled insurance program to reach coverage to all the contractors and subcontractors engaged in the project.
Why Wrap-Up Insurance Makes sense for Large Project?
For example, consider an owner-controlled insurance program obtained by the owner on the builder or contractor's account. Including add-ons, the insurance covers workers' wages, excess, professional and general liability, builder's risk, pollution and railroad protective liability. While wrap-up insurance prices can be high, the cost can be divided among the general contractors and sub-contractors.
Benefits Of Wrap-up Liability Coverage For Construction Projects When Purchased By Contractors
Benefits Of Wrap-up Liability Insurance For Construction Projects When Purchased By The Property Owner
How does wrap-up liability insurance address the limitations of individual CGL policies?
Who is Insured with a Wrap Up Policy?
Engineers, Consultants, and Architects (subject to our professional liability exclusion)
Parties not insured?
- Security protection firms