FAQ - Frequently Asked Questions:

What is a Wrap-Up?
A wrap-up is an insurance program that “wraps up” certain insurance, safety and claims management strategies into a seamless, cost effective program, which protects the owner and the participants in the project. Although there are notable exceptions, the minimum size for a successful wrap-up is generally $100 to $150 million in hard construction costs.

Rather than the owner, construction manager, contractors and subcontractors of all tiers each providing their own insurance for the construction project, one group of policies is purchased to cover all participants. Workers Compensation, Builders Risk and Commercial General and Excess Liability are the most common coverages included in a wrap-up. Pollution Liability, Professional Liability and various other coverages can also be purchased.


What are the advantages of a Wrap-Up?
The sponsor’s control of the cost of risk with an emphasis on safety typically drives the implementation of a wrap-up. The increased buying power of the sponsor and its ability, in some cases, to self-insure or fund larger deductibles produces economies of scale. Savings are realized when contractors and subcontractors exclude the costs of insurance from their bids.

Broader insurance coverage, higher limits dedicated exclusively to the project and volume discounts are added benefits of a wrap-up program. In addition, claims management is much easier with one carrier for a single policy, rather than multiple carriers with multiple policies.

Wrap-ups level the playing field for DBE firms that are generally smaller companies with higher insurance costs. DBE firms can be more competitive when insurance costs are eliminated for everyone.

Finally, a coordinated, high quality safety program provides potential for even greater savings through a reduction in claims, an aggressive return to work policy and the potential for a dividend or premium return based on a favorable claims experience.


What are the disadvantages of a Wrap-Up?
Although there are several good reasons to use a wrap-up, there can also be a number of associated problems.

Contractors may be resistant to the idea of a wrap-up. It can disrupt their existing insurance programs, particularly if the project constitutes a major portion of their work. Their contract value decreases because they cannot include the cost of insurance plus their markup.

Insurance agents may also be critical of a wrap-up because they typically lose commission income when their contractor policyholders’ insurance programs are supplemented by the wrap-up policies.

A wrap-up may not be an effective risk management technique if it is misapplied or improperly executed. The administrative plan for the wrap-up must be well conceived and executed, from the first prebid document and meeting to the final close out of the project. Additional efforts may be required to obtain and monitor data essential to the plan. Therefore, appropriate expertise and resources must be committed to the plan to make it effective.

The possibility of insurer cancellation cannot be ignored. Replacing the insurer in the middle of a project may result in higher than expected costs.

It is not possible to precisely measure the savings.

WRISC, Inc. can prepare and administer a program that will greatly reduce or eliminate these problems and ensure a successful project.


What is a Rolling Wrap-Up?
A Rolling Wrap-up is a series of similar individual projects, which independently may not meet the size criteria to be feasible for a wrap-up, however, which collectively meet the requirements.


What is an Owner Controlled Insurance Program?
An Owner Controlled Insurance Program (OCIP) is a wrap-up that is sponsored by the owner of the construction project.


What is a Contractor Controlled Insurance Program?
A Contractor Controlled Insurance Program (CCIP) is a wrap-up that is sponsored by the prime or general contractor for the construction project.


What does an OCIP Risk Management consultant do?
Prepares OCIP feasibility analyses or studies.
Designs a competitive process for brokers and carriers to obtain the best program and drive down costs.
Prepares Request for Qualifications (RFQ’s) and Request for Proposals (RFP’s) for prospective brokers.
Creates a broker’s scope of services that aims to minimize costs.
Makes the broker’s job easier and faster, which allows for a reduced broker fee.
Develops insurance specifications.
Assembles underwriting information.
Assists with contracts for brokers, contractors, and consultants.
Oversees start up, ongoing program administration, and close out.
Generally facilitates coordination of all activities.
Represents client interest in safety and claims management.
Facilitates and expedites claims handling.
Looks for opportunities to save money.
Keeps the broker on task.
Finds and corrects mistakes on policies, billings, documents, processes, etc.
Assures the effective, competitive participation of all competent insurance companies.
Creates a practical and effective safety program.
Designs an effective safety organization.
Provides experienced wrap-up safety staffing.
Renders the process of managing a complex OCIP transparent to the owner.


How do you charge for your services?
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