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Construction Insurance vs. Wrap-Up Policies

what is construction insurance: signing an insurance contract

Managing a successful business or organization at any time, regardless of industry, requires proper protection in place, often in the form of commercial insurance. Construction insurance is necessary to protect you from unforeseen injuries, accidents, legal claims, and, in some instances, even significant financial losses. Understanding the difference between traditional construction insurance and wrap-up policies can help you make an informed decision and ensure your business is protected from all angles.

What is Construction Insurance?

Construction insurance policies help protect construction workers and businesses alike with various projects without placing official companies or organizations at risk of financial or legal liability. There are a few different types of commercial construction insurance that may be suitable for an organization’s needs and demands, including:

  • General Liability Construction Insurance: The most common form of construction insurance includes general liability insurance. General liability insurance is optimal to protect you from property damage and third-party injuries that may occur during the process of completing a construction project.
  • Liability (Professional): Professional liability policies can protect against potential negligence claims that may arise with any construction business in the market.
  • Workers’ Compensation: If you own a construction business that employs staff, workers’ compensation insurance is essential to provide your employees with benefits anytime they are hurt, injured, or even permanently disabled while working.
  • Builders Risk: Builders risk insurance policies will assist with any property damage that may occur while a building is under construction.

What Are Wrap-Up Policies?

Wrap-up policies, also known as OCIP (Owner Controlled Insurance Program) or CCIP (Contractor Controlled Insurance Program), are often extremely robust solutions that can provide the umbrella protection you’re seeking as a construction company with just one single policy. There are two types of wrap-up policies that are suitable for those working in the construction industry, including:

  • OCIP: An OCIP, or Owner-Controlled Insurance Program, is an insurance policy opened and managed by a construction company or the owner of any project being invested in at the time. OCIP policies cover the contractors, any subcontractors, and the owner of the project with one single plan in place.
  • CCIP: A CCIP, or Contractor Controlled Insurance Plan, is another plan that covers both subcontractors and original contractors for specific construction projects. Once the project begins, it is typically controlled by those who are classified as general contractors.

Choosing a Policy for Your Needs

Managing construction projects without insurance isn’t just financially risky but can lead to serious legal liabilities if your employees or anyone on a job site is injured or seriously disabled during the project. When it comes to choosing between construction and wrap-up policies, compare the following before settling on a decision:

  • Collective vs. Individual Policies: If you’re seeking one single policy that covers a project, a wrap-up policy might be ideal. Construction policies may require different policies based on projects and involved parties.
  • Risk: Wrap-up policies can help centralize risk management, while construction policies may allow more flexibility in handling individual projects.
  • Cost: Wrap-up policies can offer savings through bulk investments. Traditional construction policies may cost more upfront but may also allow for more flexibility.

At Moody Insurance, we have nearly 50 years of qualified experience to help provide comprehensive commercial construction insurance solutions for your business needs. To learn more about construction insurance options vs. wrap-up policies that may be right for your business or organization, contact Moody Insurance today.

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Moody Insurance is here to help provide you with solutions to your personal, business or employee benefits insurance questions. Please fill out the form or call us at 303.824.6600.

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