Imagine you’re managing a multi-million-dollar construction project. Multiple contractors, dozens of subs, hundreds of workers, all operating under separate insurance policies. Then something goes wrong: an accident on-site sparks finger-pointing and confusion over whose insurance covers what.

Now imagine the same project, but instead of that chaos, everyone is covered under one coordinated wrap-up commercial insurance policy. Fewer headaches. Fewer disputes. Clearer coverage.

That’s the power of a wrap-up commercial insurance policy, also known as a Controlled Insurance Program (CIP), and it’s changing how large-scale construction projects are insured.

1. What Exactly Is a “Wrap” or Controlled Insurance Program?

A wrap-up policy (often called a CIP) is a single insurance program that covers most or all parties working on a construction project, typically the owner, general contractor (GC), and subcontractors, under one master policy.

Instead of each contractor carrying separate liability and workers’ compensation policies, the project sponsor (either the owner or the GC) purchases a unified policy that “wraps” all participants into one.

There are two main types:

• Owner-Controlled Insurance Program (OCIP): Managed and purchased by the project owner.
• Contractor-Controlled Insurance Program (CCIP): Managed and purchased by the general contractor.

Example:
Let’s say a general contractor, Apex Builders, is managing a $50 million mixed-use development. Instead of relying on dozens of separate insurance policies from subcontractors (each with different exclusions and limits), Apex implements a CCIP. Every subcontractor working on that project is enrolled under the same program, ensuring consistent coverage for general liability, workers’ compensation, and excess liability.

The result? Simplified administration, predictable costs, and unified claims management.

2. Why Contractors and Owners Choose Wrap Policies

There are several strategic reasons why contractors and owners prefer wrap-ups, especially for larger or more complex projects.

a. Cost Efficiency

When each subcontractor provides their own insurance, those costs are baked into bidsoften with markups. By consolidating coverage under one wrap policy, the GC or owner can negotiate better rates and eliminate redundant premiums.

Example:
A hospital construction project estimated that individual contractor policies would cost roughly $1.8 million in total premiums. By switching to an OCIP, the project secured broad coverage for around $1.3 million, saving half a million dollars while improving coverage uniformity.

b. Coverage Consistency

Every contractor’s policy is different, different limits, exclusions, and carriers. That can lead to dangerous coverage gaps, especially in areas like completed operations or additional insured endorsements.

With a wrap-up, everyone operates under the same policy terms, meaning there’s no confusion about who’s covered if a claim arises.

Example:
A roofing subcontractor accidentally damages an HVAC system during installation. Under a wrap-up, the claim is handled quickly by the unified insurer, rather than being delayed by disputes between separate carriers over liability.

c. Streamlined Claims Management

One of the biggest headaches in construction insurance is figuring out whose policy should respond when an incident happens. Wrap policies simplify this dramatically.

All claims go through a central administrator, making it easier to track, resolve, and document incidents. This reduces legal disputes and keeps projects on schedule.

3. When a Wrap-Up Program Makes Sense (and When It Might Not)

While wrap-ups are a powerful tool, they’re not for every project.

They work best when:

• The project value exceeds $10 million (some carriers require this threshold).
• Multiple contractors and subs will be on-site simultaneously.
• The project owner or GC wants tighter control over safety standards, claims handling, and risk management.

Example:
A local school district launching a $25 million renovation uses an OCIP to unify coverage across multiple schools being worked on by different trades. The consistent coverage simplifies compliance and claims oversight, perfect for a multi-site, multi-year project.

However, for smaller jobs, say, a $1 million remodel, implementing a wrap-up might not be cost-effective due to the administrative complexity and enrollment requirements. In those cases, traditional contractor insurance (with strong risk transfer agreements) may make more sense.

That’s why having an experienced insurance advisor evaluate your situation is critical.

4. How to Get Started with a Wrap-Up Policy

If you’re a general contractor or business owner considering a wrap program, here’s how to start:

1. Consult with your Hertvik Insurance agent. They’ll assess project size, structure, and the feasibility of a CCIP or OCIP.
2. Estimate total insurance costs under both traditional and wrap-up models to compare value

Partner with Exprts Who Understand Construction Risk

At Hertvik Insurance Group, we specialize in helping contractors, developers, and project owners design insurance solutions that work for real-world construction risks.

Our team understands the complexities of contractor-controlled and owner-controlled insurance programs, and we know how to help you determine whether a wrap-up is the right fit for your next project.

Whether you’re managing a single-site build or a multi-million-dollar development, we can help you protect your work, your team, and your bottom line.

Contact Hertvik Insurance Group today to learn how a wrap-up insurance program can simplify your coverage, strengthen your risk management, and save your project money.