Monday, July 15, 2024

Developing with a Wrap-Up

Developing with a Wrap-Up

This post is part of a series sponsored by TSIB.

Construction projects present unique risks and complexities that are a distinct departure from your overall insurance needs as a real estate developer. Whether the project is office, commercial, industrial, mixed-use, or retail, are you sure your risk is covered? It’s critical to mitigate any project risk so your stakeholders – employees, clients, tenants, and partners – thrive.

A Controlled Insurance Program, or Wrap-Up, is a powerful tool that real estate developers can use to mitigate their construction project risk. A Wrap-Up consolidates a multitude of insurance coverages into one program. Instead of having the various contractors working on your project procure their own insurance, as the Owner of the project, you purchase the insurance for the entire construction project and enroll eligible contractors into the program. Wrap-Ups help manage your project risk by providing:

  • More consistent insurance coverage
  • Increased project-specific limits
  • Extended completed operations coverage
  • Increased minority and DBE participation
  • Reduced cross-compliant litigation
  • Potential cost savings to the Owner

There are 2 parts to a Wrap-Up program: Placement and Administration.

During the placement phase of the Wrap-Up, the insurance is purchased. The Owner of the project, or its Broker, negotiates and purchases the insurance coverage for all eligible contractors working on the project.

The Administration phase of the Wrap-Up can be burdensome. It involves managing all the administrative needs from reaching out to contractors daily, to managing the program paperwork, developing documentation, and more. It is a key part as it ensures your contractors can start work when it’s critical they do, preventing any project delays. Many Owners choose to have a third-party Wrap Administration Service Team tackle this part of the Wrap-Up.

Interested in learning more about Wrap-Ups for your upcoming project? Speak with James today and schedule a free feasibility study.

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