If you have ever bid on a large commercial or public project and found that insurance would be provided by the owner or general contractor, you have likely encountered a wrap-up program. These arrangements can simplify coverage for a project, but they also change how a subcontractor thinks about its own policies.
This article explains the basics of wrap-ups in plain English, and the questions subcontractors often ask.
What a wrap-up program is
A wrap-up is a single insurance program covering many of the parties working on one project, rather than each contractor purchasing separate coverage for that site. Typical coverages include general liability, workers’ compensation, and sometimes excess liability.
When the project owner sponsors the program, it is commonly called an owner-controlled insurance program, or OCIP. When the general contractor sponsors it, it is often called a contractor-controlled insurance program, or CCIP.
Why project sponsors use them
Sponsors often adopt wrap-ups to standardize coverage, reduce gaps between different contractors’ policies, and manage claims more consistently. Projects that run for several years, such as large developments, are frequent candidates.
What it means for your bid
Subcontractors are typically asked to exclude the cost of insurance covered by the wrap-up from their bid. That makes it important to read the bid documents carefully so you know which coverages are being provided and which you must still carry.
What a wrap-up usually does not replace
Wrap-ups are generally limited to on-site work for the specific project. Your own policies often still matter for off-site operations, tools and equipment, commercial auto, and your completed operations exposure from other jobs. Many wrap-ups also exclude certain risks, such as professional services or pollution, so it is worth reviewing the manual closely.
Enrollment, safety rules, and audits
Participation usually involves enrollment paperwork, payroll reporting, and compliance with project safety rules. Missing deadlines or reporting incorrectly can create friction. Your regular carriers may also conduct audits that need to account for payroll that is covered under the wrap-up, so keeping separate records is helpful.
Completed operations questions
Long-term exposure after project completion is a common area of confusion. Wrap-up policies often provide completed operations coverage for a defined period, and the length varies. Ask what happens after that period ends and whether you should plan for coverage on your own policies.
Review it with an independent agent
Before you sign a subcontract on a wrapped project, it can help to have someone who understands both the wrap-up and your own program review them. An independent agent can compare how the pieces fit and flag any gaps. If you have a wrap-up project coming up, we would be glad to help.