5-Star Wrap-up Liability Insurers

5-Star Awards 2021: Construction Insurance

Wrap-up liability insurance protects stakeholders in construction projects, including engineers, owners and developers, from general liability and third-party exposures. 

5-Star Excellence Awards

  • Agile Underwriting
  • Burns & Wilcox 
  • Cansure 
  • i3 Underwriting 
  • Intact Insurance 
  • Premier Group 
  • Totten Insurance Group 
  • TruStar 
  • Victor Canada 

What does a wrap-up policy cover? 

Wrap-up liability insurance covers a team working on a construction project, like engineers, owners, developers, project managers, contractors, and architects, against general liability and third-party exposures surrounding the project – all under a single policy. This type of policy can be more advantageous for major construction projects instead of using a contractor’s general liability policy.  


Typically, you can use wrap-up liability coverage for two kinds of projects: non-combustible, fire resistant, or masonry construction project types (over $5 million) and civil works projects involving construction of dams, sewers, watermains, and bridges (regardless of project value).  


What is a wrap-up exclusion? 

It is common for a contractor’s corporate insurance policy to contain wrap-up exclusion. Anytime a contractor works on a wrap-up project, a wrap-up exclusion usually says their corporate insurer will omit coverage on that project. Sometimes, an endorsement may be used to amend that language. Because it may involve them in future claims, however, a lot of insurers might not amend it. Occasionally, that might be a problem for contractors working on wrap-up projects. 


Generally, a contractor is enrolled in the insurance program for the duration of their contract on a wrap-up project. They are, however, “closed out” of the program after completing their work. In the event of unforeseen circumstances, they are still covered by the wrap-up master policy for a length of time following the end of the project. If the wrap-up master policy expired and a claim arose after the specific time period, the contractor would look to their insurer for coverage. If a contractor has wrap-up exclusion, however, they would become responsible for the whole claim.  


In those instances, it is important that contractors seek knowledgeable insurance carriers to remove certain language and amend policies.  


What is a COC in insurance? 

COC, or certificate of coverage, is a booklet that is handed out to each person covered by a Priority Health HMO and POS plan, explaining what is covered and what is not covered. It is subject to changes as stated in any rider that might delete or add some covered benefits.  


What does a builders risk policy cover? 

Builders risk insurance policies cover a person’s or organization’s insurable interest in fixtures, materials, and equipment before being installed (or after) during renovation or construction of a structure or building, in the event that those items are lost or damaged. Builders risk insurance is also known as inland marine coverage or course of construction.  


For residential or commercial builders risk policies, there are many different groups of eligible clients, including: contractors, property owners/homeowners, builders, school districts, retail companies, investment companies/development, and house flippers. Usually, builders risk policies are available for remodelling, installation, or ground-up new construction, each of which is classified as either commercial or residential risk. It should be noted that builders risk insurance is available in different varieties, including location-specific/single-project, blanket policy, reporting form, and blanket installation policy. For example, blanket policies and reporting form can be very complex, while location specific policies can be more straightforward.  


Builders risk will protect construction sites from damage and loss, and while precise limitations and coverages vary between insurance providers, a more comprehensive builders risk policy might offer coverage for vandalism, and even, in some cases, flood, soft costs, earthquake, ordinance and law, windstorm, and extra expense and business income. Damage to temporary structures, construction material, scaffolding, subdivision signs, landscaping, and fencing could also be covered, depending on the policy.  


Does OCIP cover workers comp? 

In short – yes. OCIP, which stands for “owner controlled insurance program,” provides protection for the project owner and coordinates general liability coverage for eligible parties working on a construction project. Since construction jobs can come with multiple liability risks, potential lawsuits can impact several members of a construction crew, from a general labourer to a subcontractor to a project manager and even the building owner. That is where OCIP comes in – it can protect all parties with a blanket policy. Previously, OCIP, otherwise known as “wrap-up insurance” was used primarily for larger construction projects exceeding $50 million. More recently, however, OCIP is being used by project owners on smaller renovation jobs and residential construction.  


All policies include workers’ compensation insurance as well as commercial general liability coverage to protect interested parties from liability losses. Workers’ compensation insurance is required in most U.S. states and is regulated by the state in which the work is being done, and covers the cost of treatment associated with work-related illnesses and injuries as well as lost wages. If included in an OCIP, it covers all enrolled subcontractors and contractors on your project.   


Does State Farm offer builders risk insurance?  

Yes. Builders risk insurance can help you to protect your investment and your property. Whether you are building a business building or a new residential complex, State Farm offers builders risk insurance policies. Some of the customizable features State Farm offers for builders risk insurance include: equipment breakdown, building coverage, ordinance and law, identity restoration, and comprehensive general liability.  

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