Frequently Asked Questions

1. What is a Wrap-Up Insurance Program or OCIP?

   A Wrap-Up, wrap policy, or OCIP (Owner Controlled Insurance Policy) is an insurance idea that has been around for almost 40 years. They are policies that provide the owner of a construction project a single source of liability insurance for all involved parties from the owner/developer to the general contractor and all subcontractors and sub-tier subcontractors for the project's duration. The more common format is a program that provides general and excess liability, but wrap programs can also be written to cover workers compensation. Coverage for all participants is provided during the construction process through completion. In addition, it provides construction defect liability, usually for another 10 years, which covers the statute of repose in most states.

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2. What are the advantages of these policies for developers?

   By eliminating duplicate coverages, competing insurance carriers, and administrative hassles, wrap policies reduce the overall expenses of construction projects. In addition, these policies assure you and your lenders that all required insurance coverage is in place for the duration of the project and into the future. That's an important assurance to have as many construction defect claims arise after several years have passed. With a wrap-up, owners and contractors can mount a stronger single-entity defense in construction-defect lawsuits. Because there's only one insurance company and legal entity in the claim, decisions can be made effectively between the developer and the carrier.

3. What are the advantages for contractors?

   Contractors find that wrap programs often afford them coverages they would have difficulty obtaining on their own, and at less cost. The programs also free them from dealing with claims processing and certificate tracking.

4. Are there other advantages for developers?

   Developers appreciate the greater amount of control they have over their insurance claims handling. With an OCIP policy, developers know how many claims are being paid and can monitor insurance limits. In addition, a wrap-up can actually improve cash flow over the life of the project. With a well designed program there may even be unused premium dollars refunded to the developer at the end of the project's statute of repose.

5. Will lenders accept this plan instead of my usual certificate of insurance?

   With the increased use and risk mitigation advantages of a wrap-up policy, lender not only accept them as an alternative to traditional policies, they often become enthusiastic supporters once they understand it. We'll work directly with your lender to explain the advantages of this approach to insurance.

6. Do I have to purchase all my services from BuildersWrap Administrators? What if I have a third-party servicer I'm already working with?

   Our unbundled approach allows you to choose the services you need, and only those services.
   
   
   

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