Wrap 101

What is a Controlled Insurance Program?

  • As defined by International Risk Management Institute (IRMI);
  • http://www.irmi.com/

    “A Wrap Up or a controlled/ consolidated insurance program is a centrally procured and managed insurance and risk control program implemented for a construction project or a series of projects.”

  • It is a Shared Risk Management Program

Why Should A Wrap Up be Considered?

Always Consider the 3 C’s

  • Coverage
  • Control
  • Cost Savings


  • Wrap Up programs can;
    • Provide a Broader Scope of Coverage when compared to traditional insurance methods
    • Ensure Dedicated & Adequate Limits for the Project
    • Facilitate and Support Minority / Women Business Enterprise (MBE/WBE) Participation
    • Provide Dedicated and Focused Insurance Protection for all Enrolled Participants


  • Wrap Up programs can offer;
    • Completed Operations Coverage thru Statute of Repose
    • Reduction in Litigation, “No Finger Pointing”, One Insurance Carrier
    • Assurance in the Quality & Stability of Insurance Carriers
    • One Risk Management System including Loss Control & Claims Management
    • Enhanced Protection of the program Sponsor’s Assets

Cost Savings

  • Wrap Up programs should provide;
    • Economies of Scale in the purchase of project specific insurance
    • Elimination of the Duplication and Gaps in insurance coverage
    • Financial Savings as a Result of a Favorable Loss Experience

A typical range of savings can be .25 to 1.5% of the Project’s Hard Costs


A Wrap Up is designed to provide comprehensive and complete coverage for all covered participants. Often times during a presentation to one of our program Sponsors, the question is asked “You’ve explained the benefits of a Controlled Insurance Program, but what are the difficulties?” The following addresses some of these potential concerns:

Administrative Burden

The extent to which a Wrap Up Program creates an administrative burden on the contractor is the most subjective of a participants “perceived concerns”. The information requested is essentially no different than under the normal process. Contractors normally provide proof of insurance and policy limits, as well as, payroll estimates for their contracted work. The Wrap Up requires that this information be provided in greater detail. Wrap Up Insurance Solutions philosophy is to provide a value-added service with minimal disruption to the normal construction management process. The Wrap Up enrollment process proposed, has been streamlined to four basic and easy to follow forms; the Wrap Up Enrollment Form, Notice of Contract Award Form, Notice of Contract Completion and a Monthly Payroll Report. All “Insurance Calculation Worksheet Forms” will be completed by Wrap Up Insurance Solutions and then returned to the Contractor for signature. It is our experience that this method is the most efficient and practical way to quickly and accurately secure a Contractor’s insurance credit. Following this process, an Enrolled Contractor only needs to complete the Wrap Up Enrollment Form one time. This occurs at the beginning of enrollment into the program. The Monthly Payroll Report is provided on a monthly basis or on a mutually agreed schedule with the contractor. This streamlined process significantly reduces the amount of paperwork required and provides a smooth and efficient pathway into the Wrap Up program.

Vague Cost Savings

Part of the due diligence in developing this type of program is to make sure the projections are realistic and more importantly attainable. A key factor to consider when performing a feasibility study is to first gain a comfort level with the total dollar value of the construction “hard costs” and scope of work. All costs and potential savings will take into consideration these factors. Upfront cost savings will be obtained by purchasing insurance, on a project specific basis, at a lower cost than can be provided by the contractors. By appropriately taking into consideration these cost factors (trade scope and cost) the contractor insurance credits in relationship to the Wrap Up costs should be positive. On average, the estimated savings related to the volume purchase and underwriter safety credits for a Wrap Up Program are .2% to .35% of the project’s construction “hard cost”. An additional 1% savings is also possible with a project’s positive loss experience. Proper planning, implementation and close-out can effectively turn “Vague Cost Savings” into “Real Cost Savings”.

Duplication of Contractor's Insurance Costs

A Wrap Up Program does not duplicate a contractor’s insurance cost; it replaces it within the parameters of a Sponsor’s construction project. Generally, the coverages provided under a Wrap Up are Workers’ Compensation, General Liability and Excess Liability. The program will replace the coverages provided by the contractor’s master insurance policy. These policies will be owned and controlled by the Wrap Up Sponsor. The only time a duplication of coverage occurs is when a contractor has a flat or minimum premium charge under their master program. Often times, Excess Liability policies are written on this basis. When this occurs, it is recommended that the Sponsor not request an insurance credit for the affected line of coverage. If a contractor is unable to provide an insurance credit as a result of their program structure (and this fact have been verified by the Wrap Up Administrator), the Sponsor should not artificially impose an insurance credit onto the contractor.

The advantage of a Wrap Up now becomes control. Through this risk management process, the project will expand the limits of insurance, limit the number of insurance carriers involved on the project, coordinate and consolidate the loss control and claim management procedures and provide the maximum insurance protection of the Sponsor’s assets.

Impact On Contractor's Program

A Wrap Up Program should not have a negative impact on the contractor’s regular insurance program. In fact in many instances the reverse is true, a Wrap Up can positively impact a contractor’s regular insurance program.

A key part of the administrative process, is to verify the actual insurance costs of the contractor’s master program. This verification process will take into consideration all experience modification factors, premium discounts and other credits. By applying the contractor’s actual insurance rates, against the actual payroll incurred on the job site, the bid deduction applied will be based on true insurance costs. An added benefit to the contractor is the loss sensitive aspect of all property casualty insurance programs. Because of the Wrap Up program’s consistent and constant focus on creating a safe work environment, the loss experience within a Wrap Up program generally is lower when compared to that of a traditional insurance program. The favorable loss experience of a Wrap Up will carry over to the contractor’s regular insurance program and can help reduce a their Workers’ Compensation “Experience Modification Rate”.

Wrap Up Program Feasibility Analysis

Before considering a Wrap Up, a Program Sponsor should review these Key questions and feasibility

  • Project Scope; Size / Location / Schedule
  • Confirm Statutory Regulations
  • Review Construction Budget & Labor Costs (our team will review proposed budgets and
  • Review Carrier Premium Costs & Projections
  • Develop/Review Cash flow model(s) for the Program Sponsor
  • Review Contract between Program Sponsor, their Construction Team, and the Contractors
    /Subcontractors (all tiers)

    Make Sure ALL Wrap Up information is included in the Contract ... If it's not in the Contract .. 'it's not going to happen!


  • Has The Owner Ever Participated in a Wrap Up program?
  • If it's NOT in the Contract ...... lt's NOT going to happen!
    • Wrap Up Enrollment is Mandatory
    • Safety Requirements (i.e. 100% Fall Protection - 6 ft.)
    • Drug Testing Programs
    • Early Return-to-Work Programs
  • Who is Covered by the Wrap Up?
    • Enrolled Contractors
    • Excluded Contractors
    • (Vendors, Suppliers, Delivery Persons & Small Contracts are generally excluded)
  • Should a Maintenance Deductible be Required of an "EnroJled Contractor"?
    • GL Claims
    • Builders Risk Claims
  • What are the Contractor Insurance Cost Bidding Requirements?
    • Bid With (Provide "Deduct Alternate")
    • Bid With (Broker/Administrator will Calculate)
    • Bid Without (Provide "Add Alternate")
  • How are the Contractor Insurance Credits to be Calculated?
    • Rates Time of Award / Mobilization
    • Actual Rates Throughout Life of Project
    • Profit & Overhead Credits
    • How are "Change-Orders" handled?


  • Remember the Motivation for Implementing a Wrap Up ... "The 3 ('s"
    • Coverage
    • Control
    • Cost Savings
  • How are my Wrap Up Program Insurance Costs to be Calculated at Close-Out?
    • Payroll
    • Construction Value
  • How are my Claims being Handled?
    • Cradle-to-Grave
    • Cost Plus

The Wrap Up Does NOT Provide Coverage to Everyone at a Project Site

Typical “excluded parties are;

  1. Vendors, Suppliers & Delivery Personnel
  2. Fabrication Performed Away from the Project Site
  3. Design Professionals (Architects & Engineers) E & O
  4. Pollution, Abatement or Asbestos work
  5. At Sponsor’s Discretion, Smaller Contracts (e.g. $10,000 or less)


(WC & GL)

Wrap Up Coverages Included;

  • Workers' Compensation
  • General Liability
  • Excess Liability

Other Coverages to Consider;

  • Builders' Risk
  • A&E Professional Liability
  • Contractors Pollution
  • Pollution Legal Liability
  • Surety I Subcontractor Default Insurance


Wrap Up Coverages Included;

  • General Liability
  • Excess Liability

Coverages Typically Excluded;

  • Automobile Liability
  • Contractor's Equipment
  • A&E's Professional Negligence

The Wrap Up Solutions team will work with our Progrom Sponsor to make sure all construction related exposures are reviewed andlor addressed for each project. The following is a sample of a proposed insurance program structure:



  • All Wrap Up Insurance Limits are project specific
  • Additional Excess Liability Limits can be added on a project specific basis as required.
  • Each project will be reviewed individually to make sure all insurance related concerns,
    exposures and needs are appropriately evaluated and addressed.

Two Types of Wrap Up Programs:

Traditional Wrap Ups (WC & GL)

Single Program

  1. Construction Values of $100MM + / -

Rolling Program

  1. Multiple projects/single site $125 MM + / - over 2-3 yrs
  2. Multiple projects/different sites $150 MM + / -
  3. Minimum size $20MM + / -

General Liability Only Wrap Ups

(Most often provided for Residential construction exposures)


  1. Construction Values (CV) of $5MM +/-
  2. Multiple prospect programs are available

A Quality Wrap Up Should Provide the Following Components:

  1. Program Design
  2. Administration Systems/Processes
  3. Loss Control Management
  4. Claims Management
  5. Communication

The Cornerstone to a Successful Wrap Up is Always Communication

It is the responsibility of the Wrap Up Solutions team to deliver to the Program Sponsor and all
Enrolled Participants the services necessary to achieve the expected goals of reducing the overall
cast of construction, providing a safe work environment for all employees and protect the general
public. Our unique team of professionals has the experience necessary to meet with confidence
these goals of your Wrap Up Program.


Our Services

Wrap Up Solutions' Administrative Team is well versed in the design, implementation and close-out of Controlled Insurance Programs.