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Wrap-Up Insurance


Wrap-up insurance is a comprehensive liability insurance policy that covers all contractors and subcontractors working on a large project under one policy. The policy is usually taken out by the owner or the general contractor. This type of coverage can lessen claims disagreement or confusion arising from multiple insurers, reducing risk and potentially providing cost savings.


The phonetics of the keyword “Wrap-Up Insurance” is: /ræp ʌp ɪnˈʃʊərəns/

Key Takeaways

  1. Types: Wrap-Up Insurance is divided into two types – Owner Controlled Insurance Program (OCIP) and Contractor Controlled Insurance Program (CCIP). OCIP is managed by the project owner, while CCIP is led by the principal contractor or construction manager.
  2. Benefits: This type of insurance significantly reduces potential conflicts of interest in the event of a claim because all parties involved are typically covered under the same policy. It can also lead to cost savings as the risk is spread among more policyholders.
  3. Risks: Although Wrap-Up Insurance can offer comprehensive coverage and potential savings, it also involves administrative burdens and costs. Plus, if the party responsible for managing the insurance lacks expertise, it could lead to coverage gaps or other problems.


Wrap-Up Insurance is crucial in the business and finance world, particularly in the construction industry, because it serves to protect project owners and contractors from potential risk or liability related to the project. It is a comprehensive insurance policy that consolidates all the individual liability and risks under one coverage plan, which can help to hasten claim settlements, improve risk control, and potentially save on overall costs. This type of insurance can provide broader coverage and may give the project owner control over the insurance program. The importance of Wrap-Up Insurance lies in its ability to provide peace of mind and financial protection to all parties involved in a large construction project, mitigating risks and liabilities associated with workers’ compensation, general liability, and excess liability.


Wrap-up insurance, also known as a Controlled Insurance Program (CIP), serves the purpose of providing coverage for all parties involved in a large construction project under a single insurance policy. This type of insurance is designed to provide a comprehensive and coordinated insurance coverage that helps in reducing gaps in coverage, controlling insurance cost, and minimizing litigation among contractors and subcontractors.The primary use of wrap-up insurance is to protect the project owner, general contractor, and subcontractors from risks and liabilities associated with an ongoing construction project. These risks may include construction defects, site injuries, and damages to the property. By centralizing the risk management under a single policy, wrap-up insurance facilitates better risk management and coordination, thus ensuring that all project-related risks are adequately covered and that there is a uniform approach to handling any arising liability issues.


1. Construction Projects: Wrap-up insurance is commonly used in large scale construction projects. For example, if a company is constructing a new skyscraper downtown, they would get a wrap-up insurance policy. This policy would cover all the contractors, subcontractors, and construction workers involved in this project to protect from risks including construction defects, on-site injuries, or damage to equipment/materials. 2. Stadium or Arena Construction: Another example can be seen in the construction of sports arenas or stadiums. The owner or the general contractor may purchase a wrap-up insurance policy to cover all entities involved in the project. For instance, when the MetLife Stadium (home of the NY Giants and Jets) was built, a wrap-up insurance was used to manage the insurance responsibilities of the numerous contractors involved.3. Large-Scale Infrastructure Projects: Major infrastructure projects like bridge, tunnel or highway construction also involve many parties including contractors, subcontractors, architects, and engineers. Government entities or private companies undertaking such massive projects might opt for wrap-up insurance to provide comprehensive coverage. For instance, when Boston’s “Big Dig” project was executed to reroute the city’s Central Artery, a wrap-up insurance was likely used to manage the risks associated with such a large-scale construction project.

Frequently Asked Questions(FAQ)

What is Wrap-Up Insurance?

Wrap-Up Insurance is a comprehensive liability insurance policy that protects all contractors and subcontractors working on large projects. It’s typically used for big construction projects and is purchased by the project owner or general contractor.

Who typically purchases Wrap-Up Insurance?

This type of insurance is typically purchased by the project owner or the general contractor. It provides coverage to all parties involved in the project, including subcontractors.

What does Wrap-Up Insurance cover?

It covers risks associated with a construction project, including workers compensation, general liability, and excess liability. However, it does not cover professional or design-related risks.

What are the advantages of Wrap-Up Insurance?

Some advantages include potential cost savings, centralized control over the insurance program, uniform coverage for all contractors and subcontractors, and eliminating cross litigation among contractors.

Why is Wrap-Up Insurance necessary?

It’s necessary because it helps to avoid potential gaps in coverage that might exist when individual contractors and subcontractors have their own insurance policies. It simplifies things by wrapping all necessary coverage into one policy.

What is the difference between an OCIP and CCIP in relation to a Wrap-Up Insurance?

OCIP stands for Owner-Controlled Insurance Program and CCIP stands for Contractor-Controlled Insurance Program. The significant difference is who controls the insurance program – the owner in an OCIP and the contractor in a CCIP.

Are there any disadvantages to purchasing Wrap-Up Insurance?

The major disadvantage is the high upfront cost and complexity involved in managing the insurance program. Smaller contractors may not have enough insurance knowledge to understand their duties under this type of policy.

How is the cost of Wrap-Up Insurance determined?

The cost is usually determined based on the total cost of the construction project, the type of construction work being performed, and the project’s duration. Other factors may also take into account, like the contractors’ safety records.

Does Wrap-Up Insurance cover damages to the completed project?

Wrap-Up Insurance generally does not cover damages to the completed project, which are often covered under builder’s risk insurance. However, some Wrap-Up Insurance policies may include completed operations coverage within the general liability section of the policy.

Can a Wrap-Up Insurance policy be canceled?

Yes, just like other types of insurance, a wrap-up insurance policy can be canceled. However, considering the complexity and cost of these policies, cancellation may come with financial penalties.

Related Finance Terms

  • Project Limit: The maximum amount of coverage provided by the wrap-up insurance for a specific project.
  • Wrap-Up Insurance Administrator: The individual or entity responsible for managing the wrap-up insurance program. This includes but is not limited to tasks such as handling insurance claims, monitoring safety, and compliance, and reporting to the insurance provider.
  • Enrollment Process: The process of enrolling contractors and subcontractors in the wrap-up insurance program. This typically involves the submission of various forms, certificates, and other required documentation.
  • General Liability Coverage: A core part of wrap-up insurance policy. It offers coverage for bodily injury, property damage, personal injury, and other kinds of harm that can arise from business operations.
  • Excess Liability Coverage: Additional coverage that could be included in a wrap-up insurance policy. This coverage kicks in when the costs of a claim exceed the limits of the primary policies included in the wrap-up insurance program.

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