Insurance: Wrap Up versus Non Wrap Up. It’s important to know the difference. Do you?
By Jenny Hutchinson
Are you a General Contractor or Sub Contractor working on projects involving government regulated contracts?
You are speaking with your insurance broker, either getting a new quote or renewing your Commercial General Liability policy, when they ask you; "What is the split between work done under ‘Wrap Up’ and ‘Non Wrap Up’? Too often the contractor’s response is "I'm not sure, I've never heard that term before". If you are being asked the ‘Wrap Up’ question, your broker is familiar with construction insurance. If you do not recognize this term despite working on larger projects, you might be paying too much for your insurance and coming up short on coverage if there is a claim. Knowing more about ‘Wrap Up’ insurance is the first step in tailoring coverage to suit your needs.
There are many construction contracts that require ‘Wrap Up’ liability insurance. The coverage is purchased by either the owner or prime contractor and is meant to provide liability protection to all tiers of contractors and sub-contractors under one main policy specific to the project site. It is very important that all contractors maintain their own Commercial General Liability policy as it will respond as “back-up” coverage in the event the liability limits of the ‘Wrap Up’ are exhausted due to a large claim.
It is also important for the Prime Contractor and Sub-contractor to be aware of the deductible limit on the ‘Wrap Up’ Liability policy. These deductibles are often higher than on a standard Insurance policy. For example, typical Commercial General Liability will have a deductible of $1,000, however, with a Wrap up it is common to see a deductible starting at $10,000 and going up from there. Therefore you need to be aware of the contract that you enter into and what your exposure is. Often the agreement between Prime Contractor and Sub-contractor may stipulate a transfer of risk. This provision states the individual causing the damages may be responsible to pay back the deductible to the Prime Contractor. This could be difficult for some to absorb financially. Being aware of the deductible limit will allow your broker to decide on a plan of action to mitigate this financial impact. Your Insurance broker is a great asset to you and may be able to advise options to “buy down” that deductible making it more affordable to you.
The moral of the story is how important it is to have a strong and open working relationship with a knowledgeable Insurance Broker. They should be kept in the loop on all your contractual obligations and requirements in order to protect you. An Insurance Broker is here to guide you and offer the correct insurance so you are covered in the event of a loss, potentially saving you from financial hardship due to a simple coverage requirement.
Jenny Hutchinson, Wilson M. Beck Insurance Inc.
This article first appeared in the 2014-2015 issue of SICA's Construction Review Magazine. To read the entire magazine click here.
Revolutionizing Canada's Construction Industry: The Federal Prompt Payment Legislation
Young Builders Launch Party Wrap Up
CCO Workshop 2024
Membership Appreciation Evening Wrap Up 2023
CCA Hill Day 2023
EBT Flu Clinic Dates
SICA Golf Tournament September 2023
Long Term Members 2022/2023
Trap & Skeet 2023 Wrap-up
SICA Golf Tournament June 23rd 2023
Industry Awards of Excellence
BC Land Title & Survey Online Filing Process
Join the Virtual Webinar
The SICA September Golf Tournament was a hit!
Farewell to our Education Admin and Hello to our new SICA staff 2022
CCO Workshop 2022
MOTI and Infrastructure BC Seeking Interest From Qualified Firms For BC Highway Reinstatement Program RFQ
Prompt Payment Included in ‘Report on the Budget 2022 Consultation’
Regional Construction Associations Partner with BCCA Employee Benefit Trust to Provide Flu Shots for Industry
B.C. associations call on province to practice fair, transparent procurement
SICA announces 2020/2021 Industry Awards of Excellence Finalists
2021 Annual Report
Kelowna Crane Incident Legacy Education Fund
#Hangahighvisoutside
Brooklyn Site Crane Accident Statement
Construction Fast Lanes for COVID-19 Vaccine
Every Child Matters - Indigenous History Month
Latest Construction Industry Statistics Reveal Strength Despite Pandemic Challenges
BCCA Response to BC Budget 2021
CCA Responds to 2021 Federal Budget
Construction Month 2021
BuildForce Canada releases annual 10-year forecast
SICA training courses prove practical and meaningful to students
2021 Gold Seal Program Changes
Building Forward: Virtual Conference 2021
Nomination Period Opens for SICA’s Industry Awards of Excellence
Meet SICA's 2020 New Board Members
SICA's 2020 Annual Report
COVID-19 Update
2019 Industry Awards of Excellence Winners
SICA announces 2019 Industry Awards of Excellence Finalists
Nominations sought for SICA’s Industry Awards of Excellence
The 19th Annual CCO Workshop
2018: Year in Review
The SICA Fund in Action at Peter Greer Elementary
Celebrating the Holiday Season with SICA
Membership Benefits
As a Member you are a part of a collective voice, the SICA voice. Together, our voice is changing the construction community and helping your business grow through advocacy, networking events, affinity programs, direct business leads and more. Our voices promotes fairness, transparency and open communication in the construction industry. Join SICA to grow your business today and be a voice for our industry tomorrow.
JOIN NOW