What Wrap-Up Programs Actually Mean for Your Business
If you've bid on a large commercial or public works project, you've probably encountered a wrap-up insurance program. The project owner or general contractor buys a single insurance policy covering everyone on the job. Sounds simple enough, but the details matter.
OCIP vs. CCIP
Owner-Controlled Insurance Programs (OCIPs)
The project owner purchases the policy. Every contractor and subcontractor working on the project enrolls in the program. Your own GL and workers' comp don't apply to work performed on that project. The owner handles all insurance administration, and you receive a credit to remove insurance costs from your bid.
OCIPs show up frequently on public works projects, university construction, hospital builds, and large commercial developments. The threshold is typically $50 million or higher in project value, though some owners use them on smaller projects.
Contractor-Controlled Insurance Programs (CCIPs)
The general contractor buys the policy instead of the owner. Same concept, different sponsor. CCIPs are becoming more common as large GCs realize the cost efficiencies and control benefits.
How Enrollment Works
When you're selected for a wrap-up project, you'll receive enrollment documents requiring your insurance information, payroll projections for on-site work, and loss history. The wrap-up administrator uses this to calculate your insurance credit, which represents the portion of your bid that would normally go toward your own insurance premiums.
Getting this credit calculation right matters. If your normal GL rate is $15 per $1,000 of revenue but the administrator only credits you $10, you're leaving money on the table.
What's Covered and What's Not
Wrap-up policies typically provide general liability, excess liability, and workers' compensation for on-site work. They usually don't cover your off-site operations, your shop or yard, auto coverage, professional liability, or work performed away from the enrolled project.
Your own policies still need to cover everything outside the wrap-up project. Don't cancel your programs just because you're enrolled in a wrap-up.
Completed Operations Tail
This is the most important part many contractors overlook. Wrap-up programs include a completed operations tail, usually five to ten years after project completion. This covers claims that arise from your work long after the project finishes.
Make sure you understand how long the tail runs, whether there are any gaps in the reporting period, and what happens if the project owner or wrap-up administrator disappears.
The Financial Impact
For subcontractors, wrap-ups can work in your favor. You don't pay insurance premiums on that project's work, which improves your cash flow. Claims on the wrap-up project may not affect your own experience modification rate, depending on program structure. Your own loss runs stay cleaner.
The downside is less control over claims handling and potentially higher deductibles than your own program. Some contractors also find the enrollment paperwork burdensome.
Common Questions
Do I still need my own insurance if I'm on a wrap-up project?
Yes. The wrap-up only covers on-site work for the enrolled project. Your own policies handle everything else, including your shop, other projects, and auto coverage.
What happens if I have a claim on a wrap-up project?
Report it through the wrap-up administrator, not your own carrier. The wrap-up policy responds, and ideally, the claim stays off your own loss runs.
Can I opt out of a wrap-up program?
Generally no. If the project requires enrollment, you must participate as a condition of your contract. Refusing typically means you won't get the job.