Contractors and subcontractors that are hired for projects that cost millions of dollars often look at wrap-up programs for their insurance needs. This insurance is a liability policy that bundles several different insurance needs into one plan. Owner-controlled and contractor-controlled are the two types of wrap-up insurance plans.
Who Controls the Plan?
With contractor-controlled insurance, the general contractor may take out the plan to extend coverage to any of the contractors or the subcontractors that will be working on the project. An owner-controlled policy is taken out by the project owner and covers a list of contractors on the project. It doesn’t matter who takes out the plan, as the insurance is a peace of mind and blanket coverage options protecting everyone involved.
Why Choose Wrap-Up?
If the owner or the contractors each took out their own insurance policies, there could be gaps in the coverage or the limits may be insufficient for the damage or work needed. With wrap-up, the coverage plan includes basic exposures but covers additional risks through add-ons like workers’ compensation, excess liability, pollution liability, builder’s risk, professional liability, and railroad protective liability.
A wrap-up policy is more expensive than a general liability policy or even a more traditional construction plan with additional endorsements. However, you can divide the costs between the contractors and subcontractors on the project, making it an affordable and comprehensive protection option.