Wrap-Up Challenges and Benefits

Wrap-Up Challenges and Benefits

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.

There are 2 main types of Wrap-Ups:

When determining which program will help you accomplish your goals, here are some benefits and challenges you should be aware of.  

CCIP Challenges

In a CCIP, the General Contractor (GC) holds the entire responsibility of the program. This means the project's risks and exposures, including financial risks, fall on the GC. The GC is responsible for handling the subcontractor enrollments, assisting with all administration paperwork, and managing the project claims. Hiring a Wrap Administrator can definitely help relieve some of the administration pressure.

OCIP Challenges

An OCIP is a little different where the Owner is responsible for the program. A big difference here is that the Owner is required to provide collateral requirements. This can include 100% prepayment for any premiums and expected losses, a letter of credit, or cash collateral. The Owner should consider each with respect to their overall cash flow. In addition, the Owner must hire a Wrap Administrator to relieve the paperwork burden involved. 

Another challenge is the Owner must be engaged in the claims management process even after a project is completed. Unfortunately, this can extend between 5 to 10 additional years. Any savings and losses cannot be determined until all of the claims have been settled. However, in a CCIP, the Owner can close their books when the project is complete since the GC is responsible for this.

CCIP Benefits

In a CCIP, the GC will reap many of the program benefits. Some of these include:

  • Premiums include all of the costs – variable and fixed
  • Consistent risk transfer in all documents
  • Established Crisis Management Protocols
  • Guarantee cost – no deductibles
  • Strong Return-To-Work Programs


OCIP Benefits

Whereas, in an OCIP the Owner will be the benefactor of many of the program’s advantages. These include:

  • Coverage availability
  • Cost control
  • Improved safety
  • Claim control
  • Enhanced and uniform coverage
  • Reduced litigation

No matter which program you choose, the goal of both is to provide you with peace of mind and assurance that your project is well protected. If you have more questions about the challenges and benefits between a CCIP and OCIP, reach out to TSIB today and speak with one of our Controlled Insurance Specialists!

Check out this video to determine if a CCIP or OCIP is the best fit for your Construction project!


Still not sure if you should even consider Wrap-Up Insurance? Download our traditional vs Wrap-Up eBook today for more information.

Download TSIB's Wrap-Ups eBook!

TSIB’s Risk Consultants are currently servicing the following locations:

East Coast: New York City, NY; Bergen County, NJFairfield County, CTPhiladelphia, PA

Texas: Austin, San Antonio, Houston, Dallas

California: Orange CountyLos Angeles County, Riverside County, San Bernardino County, San Diego County

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