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A Wrap Up policy is a smart risk management tool, especially for larger projects. It gives both the owner and general contractor peace of mind knowing that, in the event of an accident, there is one point of contact to negotiate the claims process. However, the process that follows in the event of a claim is just as important in eliminating the uncertainty of coverage.
In the absence of a wrap-up, when a claim is filed, the first order of business seems to resort to the ‘blame game.” This mindset is particularly detrimental when faced with a Wrap Up claim. It is important to remember that all major participants in the execution of the contract are “insureds” under the Wrap Up policy (meaning that you cannot subrogate against each other). Losses are settled under the terms of the Wrap Up policy, not under the various individual liability policies held by the major participants. The deductible will ultimately become the responsibility of the party found liable for the loss as outlined in the contract terms.
The intent of a Wrap Up policy is to make it easier to manage all aspects of risk – especially when there is a problem.
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