The under-construction Golden 1 Center, which should be home to the NBA’s Sacramento Kings in about a year is a nearly $500 million construction project with dozens if not hundreds of subcontractors. From a risk perspective, it is a fairly complex project, one Wrap Up Insurance Solutions Sr. Vice President Larry Jackson knows well.
His business has provided wrap-up insurance for this and many other high-profile construction projects across the US. Other current projects include the Dallas Cowboys office complex and practice facility and a $350 million renovation and expansion of the University of Oklahoma football stadium. It isn’t just major public projects they work on, though. Jackson says his firm can provide wrap-up services for expensive single-family homes and condominium or townhouse projects as well.
Over the years, the firm—with offices in San Francisco and St. Louis—has managed more than 300 projects worth more than $30 billion. They work directly with contractors and project owners as well as through the independent agents who already represent such clients.
Jackson said using a firm like his to provide wrap-up services typically cuts cost on a major project by about 0.5%, or $2.5 million on a $500 million project. Without wrap-up insurance, he said, each subcontractor on a project would bill about 2% of total invoices for insurance. By covering all contractors and subcontractors under one policy, the cost comes down to about 1.5%. More importantly, he said, project risk becomes much simpler to manage. When you put everything under one policy, Jackson said, people know who to talk to when there is a problem. Instead of having to determine which subcontractor’s insurance carrier is responsible, the owner simply calls Jackson.
That simplicity is even more important when a problem develops 5-10 years after occupancy, he said, when it can be far more difficult to find the subcontractor whose work caused or contributed to the problem, then reaching their insurer, who may try to put some of the responsibility on a different subcontractor. With a wrap-up policy in place, problems are handled much more expeditiously, he said.
“A wrap-up policy covers the entire project and everyone who worked on the project,” Jackson said. “If a window leaks and causes problems with drywall or electrical, you only deal with one claim.”
He said there are a number of companies offering similar products, but he thinks his is unique in that the management team, including him and fellow senior VP Brian Billhartz, have been together for 17 years.
