WRAP Insurance, also known as OCIP (Owner Controlled Insurance Policy) or CCIP (Contractor Controlled Insurance Policy) is an all-encompassing policy that will protect all contractors and subcontractors working on the same project. Why should you have WRAP insurance? It provides some significant benefits and mitigates risk in ways that General Liability sometimes falls short.
1. It covers your subcontractors.
Do you know whether your subcontractors are all properly insured? And do you have the appropriate risk transfer indemnification agreements for all your projects? If you don’t know the answers to these questions, or the answer is no, you are likely open to some very serious financial risks. If a claim is filed on one of your projects, you could take a hit even if your company wasn’t directly at fault. A WRAP policy ensures that everyone working on the project is covered and the gaps that often exist in a General Liability policy are filled.
2. The Claims process can be quicker and less costly.
Because everyone on the project is represented by the same carrier, you avoid those “shotgun lawsuits” that can pop up where contractors not even involved in the issue are named in the suit. Under a traditional General Liability model, each party is representing their own interests and potentially settling at higher amounts than necessary. This can drive up the length and cost of the suit for everyone. With one policy that covers everyone, the process is streamlined, and the costs are better contained.
3. It encourages a culture of safety through common goals.
When all parties are covered under a WRAP policy, subcontractors on the project have common goals: risk management, safety, and quality work. Because they all have skin in the game under the same policy, they all share the risks and therefore work harder to keep safety and workmanship at their highest levels.
4. Work is covered through the Statute of Repose.
In the State of Utah, the Statute of Repose is six years. This means that anytime within six years after the completion of your project, a claim can be filed against you. A WRAP policy extends coverage through this period, so you are protected from unpredictable problems down the road.
5. You won’t suffer a hit against your general liability policy.
Claims against your General Liability insurance will cause premiums to increase over time and make you less insurable. A WRAP policy keeps those claims from impacting your General Liability insurance and helps you maintain your insurability in the future.
6. Bypass “Workmanship” or “Faulty Work” Exclusions That are Common in General Liability Policies
Often a General Liability policy will only cover property damage or bodily injury resulting from faulty work. But what if you are being sued for defects that didn’t cause any physical damage or injury? Certain WRAP policies can be purchased with those exclusions removed or amended, so those “defects” would be covered. For more information about how WRAP insurance can benefit your business, contact Beehive Insurance today.