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Understanding how insurance cost savings work on a Controlled Insurance Program (CIP), also known as a Wrap-Up, and who retains the risk/reward is important. There are several varieties of CIPs which differ by the coverages included as well as entities that purchase them (owner vs contractor). However, the savings potential is differentiated by one major factor; is the Wrap-Up in question providing two-lines of coverage or a single-line?
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Regardless of the structure selected for your project, implementing a CIP is a unique way to manage a multitude of insurance challenges that arise on construction projects. The CIP (controlled insurance program) structure provides significant advantages to a project which include:
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If this is your first Construction project, finding the right insurance program is the key to the project’s success. Traditionally, Project Owners require all of their Contractors to provide their own insurance in their bid. An increasingly popular insurance method is to implement a Wrap-Up Program.
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Wrap-Ups are a great risk management tool for large construction projects. There are many moving parts of a Wrap-Up program, which can seem overwhelming if you do not have the proper structure in place. The key elements of a Wrap-Up that create this structure include Program Design, Financial Risk, Administration, and Claims Management.
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A Controlled Insurance Program (CIP, also known as a Wrap-Up) is a smart risk management tool for any construction project. However, before the first shovel hits the dirt, you have a big decision to make—who will be the Sponsor for your project?
The Sponsor is responsible for the Wrap-Up’s key elements, like Program Design, Financial Risk, Administration, and Claims Management. With an OCIP, the Owner is the Sponsor for the project. With a CCIP, the General Contractor is the Sponsor for the Project.
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Once you have decided to utilize a Wrap-Up program on your construction project, it’s important to decide who will Sponsor the program. Determining the best Sponsor is crucial, as this sets your project up for success.
The Sponsor is responsible for the Wrap-Up’s key elements, like Program Design, Financial Risk, Administration, and Claims Management. With an OCIP, the Owner is the Sponsor for the project. With a CCIP, the Contractor is the Sponsor for the Project.
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You have decided to utilize a Controlled Insurance Program (CIP, also known as a Wrap-Up) for your construction project. That’s great! Now deciding who will be the Sponsor for your project is crucial for its overall success.
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Wrap-Up Insurance Programs are an attractive alternative to insure a project. These programs allow for the Purchaser (typically an Owner, Developer, or General Contractor) to reduce the overall costs of insurance while simultaneously reducing administrative costs and consolidating the management activities of the program. These products are designed to streamline the insurance process between a single Purchaser, Broker, and Underwriter. Below are 6 types of Wrap-Up Programs:
Topics: Wrap-Up Insurance, CCIP, OCIP