THAT’S A WRAP
It is important to know how wrap insurance is different from a traditional liability policy.
BY WILLIAM F. KNOWLES AND BRENDAN WINSLOW-NASON
rap” insurance programs have become a popular alternative to traditional insurance arrangements, particularly on large construction projects. However, contractors need to be aware of some of the unique issues that arise in wrap programs – specifically, liability insurance wraps. In the past, each contractor on a construction project secured its own liability insurance policy to cover individual liability exposures, including those exposures on a project. Under a wrap program, either the owner or the general contractor secures a single insurance policy that applies to the entities and risks involved in the project. These programs are commonly referred to as an Owner Controlled Insurance Program (OCIP) or Contractor Controlled Insurance Program (CCIP). Wrap liability policies typically use standardized general liability provisions that you would find in the more traditional forms of liability insurance. Thus, the wrap general liability policy does not normally change the fundamental policy language that you would find in your more typical individual insurance policy.
Because traditional insurance forms often support a wrap program, it tends to involve many of the same coverage issues that traditional forms of insurance involve. But there are a number of unique issues that arise with wrap programs that will set it apart from your traditional insurance.
Scope Of Coverage
A primary inquiry seeks to learn who is insured and where are the coverage boundaries. It is rare to find a wrap program that provides coverage for every entity working at a project or for every risk that a project faces. An OCIP will normally name the owner, general contractor (or prime contractor) and subcontractors as insureds.
CONSTRUCTION-TODAY.COM MARCH 2012
Table of Contents for the Digital Edition of Construction Today - March 2012