Wrap-up Insurance Programs - help for Construction Contractors  Hate Controlled Insurance Programs (CPIs or Wrap-Ups)? You’re not alone - 80% of contractors think they stink. Wrap-up insurance is where a sponsor buys insurance policies to cover the project and then ask the contractor to back out the costs of general liability and excess or umbrella and workers’ compensation insurance on their bids. The folks who push this insurance try to convince contractors that this offers them higher liability limits and reduces cross-contractor litigation. They sell this stuff as insurance on steroids, the ultimate in protection. Contractors on the ground say that’s not reality. Between bad documentation, poor administration and surprising gaps in coverage, wrap-up insurance often winds up costing contractors more in worker’s comp premiums on their non-wrap insurance policies. It can also hit construction contractors with higher administrative costs, forcing them to use inequitable worksheets to deduct insurance costs, piling on extra audits for each wrap-up project on top of normal insurance audits, making them tack on additional safety programs above and beyond regular OSHA, errors in audits delaying payment, huge deductibles, etcetera. Even though it’s a huge pain in the rear for contractors, more and more big jobs are demanding wrap-ups, especially government jobs. There’s not much help available for navigating the traecherous waters of wrap-up insurance, but there is some. Check out Duke Mills’ book “Contractor Survival Guide for Wrap-Ups” at wrapupexperts.com. It has ground-level stories from real companies, gives you explanations and definitions for all those obscure terms, and lots of tips to help you guard your profits from bid mistakes and audit over payments.
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