Wrap-up Liability
Protection for all trades working on a single project.
Wrap-up provides liability protection for all trades working on a single project.
Most construction projects have a number of trades and contractors coming and going from the site on a daily basis, and this can go on for months - even years! Although each business and individual that enters the project probably has their own insurance, its important that the developer, or owner, protects themselves from claims made against them as a result of one of these other trades or contractors.
Wrap-up liability, which is packaged separately from a Course of Construction (COC) policy, is an all-encompassing liability coverage that provides protection for all parties working on the project.
The policy is referred to as a ‘wrap-up’ because it bundles the risk of all the construction companies and professionals working on the development and places a single liability limit (normally between 5M-10M) that protects everyone. Unlike finished construction, which places the structure and liability coverage on the same policy, projects require two separate policies for complete protection: COC (for the structure) and Wrap-up (for the liability).
Wrap-Up Liability vs Course of Construction Insurance
| Coverage | Wrap-Up Liability | Course of Construction (Builders Risk) |
|---|---|---|
| Primary Purpose | Covers legal liability for bodily injury or property damage to third parties. | Covers physical loss or damage to the construction project. |
| What Is Insured? | Owners, contractors, subcontractors, consultants, and other project participants named under the wrap-up. | The building under construction, materials, and equipment (subject to policy terms). |
| Example Claim | Construction activities damage a neighboring building. | Fire damages the partially completed building. |
| Covers the Project Itself? | Generally no. | Yes. |
| Covers Third-Party Lawsuits? | Yes. | No. |
| Purchased By | Usually the owner (OCIP) or general contractor (CCIP) for the entire project team. | Usually the owner, developer, or general contractor. |
Need Help Determining If Your Project Requires Wrap-Up Liability Insurance?
For projects involving multiple contractors, subcontractors, and consultants, Wrap-Up Liability Insurance can help provide consistent coverage, simplify claims management, and protect project stakeholders from third-party liability exposures throughout the construction process.
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Wrap-up liability insurance is a project-specific insurance policy that provides liability coverage for multiple parties involved in a construction project under a single policy. Depending on the arrangement, the policy may cover the owner, developer, general contractor, subcontractors, architects, engineers, and other project participants. It is designed to simplify risk management and reduce potential coverage gaps between individual contractors' policies.
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A wrap-up liability policy typically covers third-party bodily injury, property damage, legal defence costs, cross-liability claims between insured parties, and completed operations coverage for a specified period after construction is complete. For example, if construction activities damage a neighbouring property or cause injury to a member of the public, the wrap-up Liability policy may respond.
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Generally, no. wrap-up liability Insurance is designed to cover claims involving third-party injury or property damage. Damage to the project itself, including the building under construction, materials, or work in progress, is typically covered under a separate course of construction (builders risk) policy. Many Canadian construction projects purchase both policies because they cover different types of risk.
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Wrap-Up Liability Insurance is commonly purchased by project owners, developers, and general contractors for medium to large construction projects involving multiple contractors and subcontractors. These policies are often used for commercial buildings, condominium developments, institutional projects, public infrastructure, and large renovation projects where centralized liability coverage is beneficial.
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The cost of a wrap-up liability policy varies based on factors such as project value, project type, construction methods, location, project duration, liability limits, and claims history. Premiums are commonly calculated as a percentage of the total construction value, with larger or higher-risk projects generally requiring higher premiums. Insurers evaluate each project individually and provide customized pricing based on the specific risks involved.
Wrap-Up Liability FAQs
Looking to ‘Wrap-up’ your liability risk?
Every project is unique in its own right, so it’s important that we gather pertinent information that will assist us in providing you with an appropriate solution.
Complete the form below and one of our Alteri agents will be in touch to go through your project in further detail.