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Although a wrap-up will not be advisable for many projects, significant benefits may be realized using this risk transfer technique. This technique “wraps up” certain insurance, safety and claims management strategies into a potentially seamless, cost effective program, which protects the owner or sponsor and the participants in the project. Significant benefits could include:

Savings of 1% to 3% of total construction costs.
Enhanced DBE participation.
A coordinated, high quality safety program.
Claims management with public relations sensitivity.
Broader insurance coverage.
Higher insurance limits dedicated exclusively to your project.
Ease of certificate administration.

While the benefits of a wrap-up are attractive, potential problems must also be addressed:

Contractors may resist the concept.
Insurance agent(s) may also be critical if they stand to lose commission from their construction policyholders.
There may be an additional administrative burden.
Premium costs and coverages are not guaranteed if the insurance market hardens or the insurer cancels.
It may be difficult to precisely identify the amount of savings.
The sponsor’s top management may not support the commitment to an effective safety program.

The wrap-up owner or sponsor typically assumes an administrative burden in acquiring brokers, insurance carriers and safety staff as well as providing on-going coordination and oversight of these programs. Our professional wrap-up team on the sponsor’s behalf can perform these services, from feasibility studies to final closeout. In the alternative, if desired by the sponsor, a wrap-up program under the sponsorship of the builder or construction manager may be provided on a lump sum basis which can relieve the owner of all responsibility for the effort while receiving most of the benefits of the wrap-up.

Read about a successful wrap up in the city of San Diego.