Covers all parties in the construction project Owner-Contractor-Sub-Contractor-Consultants (excluding suppliers and security guards)
Coverage for bodily injury and property damage
Same exclusions as general liability policy
Excludes damage to project
Dedicated Limits
Dedicated Completed Operations
Covers entire term of project
Should be non-cancelable - important
General Liability vs Wrap-Up Liability
General Liability Vs. Wrap-up Liability
Question: Which is better?
The simple answer: Neither, as it depends on your point of view!
Let’s look at the issues.
General Liability Vs. Wrap-up Liability
General liability
Either owner’s or contractor’s operational policy
Renews annually
Insures a single entity and its related firms
Single limit (per occ./agg. as applicable) covering all the Insured’s operations
Wrap-up liability
Project-specific
A specialized general liability policy
Covers multiple, unrelated Insureds but limited to a certain purpose i.e. the Project
“One Time” policy with a definitive start and finish that spans the project term plus a fixed “Completed Operations” period
A Comparison
Contractors arrange coverage resulting in inconsistent coverage, sub-limits and gaps
Individual coverage is often more restrictive
Claims handling is complicated with several insurance carriers involved
Insurance costs hidden in price of Contractors’ Bid and, though most individual policies are smaller, in total they may be more costly
A Comparison
Preferred by some Contractors due to established relationships with their own insurers and brokers
Contractor provides evidence of insurance to Owner including interest of the latter. However, such evidence is of questionable value to Owner and does not guarantee the actual existence of coverage
Annual aggregate limit applies to all Contractor’s operations
A Comparison
Owner has to administer and review the existence of the many insurance policies over the potentially many years of the Project, and thereafter
Small Contractors usually carry low limits of liability
Potential dispute between various insurers over which policy(ies) responds
Under this Policy, Owner has to rely on “Additional Insured” status which does not confer privity of contract
A Comparison
Typically lower deductibles more in keeping with Contractors ability to absorb risk
Policy excludes damage to Contractor’s own work after completion unless work was done by a Sub-Contractor (allows insurer to subrogate against Sub-Contractor)
A Comparison
Broad based coverage for damage to the Project limited only by Broad Form Property Damage (BFPD) provisions
Completed Operations trigger for each Contractor as each completes its own work
Coverage is for all operations of the Insured
Automobile
Covers physical damage to vehicle as well as 3rd party bodily injury / property damage
Should cover all vehicles owned, leased or licensed
Should be provided by all parties to the construction project
Should be endorsed to give the owner notice of cancellation
Umbrella / Excess Liability
Excess of general liability - wrap-up or automobile policy
Increases limits of primary policies
Follows form of underlying coverage
Contractors Equipment Floater
Covers all equipment owned / leased by contractor (or subs)
