Avoiding Gaps in Wrap Insurance Coverage for Construction Projects

Description

With construction booming, contractors and developers are turning to project-specific wrap-up insurance programs to insure such projects and to rolling (multi-project) wrap-ups. Whether structured as an owner controlled insurance program (OCIP) or a contractor controlled insurance program (CCIP), the benefits of wrap-up programs include expanding the bidding pool for difficult-to-insure projects such as condominiums, the ability to tailor coverage to the construction exposures at a project and to avoid disputes among multiple insurers by covering the key players under the same program.

Wrap-up programs must be carefully negotiated and structured. And while such an approach allows the parties to tailor the insurance to the project, it is also rife with potential pitfalls. Wraps have terms, conditions, and exclusions that require analysis and negotiation, as well as specified limits of liability and fixed beginning and ending dates.

There is no standard wrap policy form, and there frequently is little case law guidance on the workings and interpretations of these programs different from the law applying to the constituent parts of the program. Savvy counsel must recognize innovative options and potential issues at the outset.

Listen as our authoritative panel of experienced construction insurance counsel addresses the issues and pitfalls with wrap insurance programs, the coverage issues that often arise, including coverage gaps and eroding or inadequate limits, practical alternatives to transfer risk outside the wrap-up, and strategies to involve non-enrolled entities and their insurers.