Wrap-Up Liability Insurance

Large-scale construction projects in Canada continue to increase with a forecasted need for over 320,000 new construction workers for the year 2020. There’s nothing all too new here because construction has been one of Canada’s major industries for some time now, giving jobs to over 1.2 million Canadians.

A significant portion of this massive workforce is contributing to large projects with values exceeding $5 million.  For such projects, a common question on each project owner’s mind is “Are the individual CGL (Commercial General Liabilities) policies of each contractor enough to provide adequate coverage?” And moreover, is this conventional type of insurance manageable and cost-effective?

For projects with values exceeding $5 million it is highly recommended to get wrap-up liability insurance. For projects like this, wrap-up liability insurance is a more efficient and more cost-effective risk management program. 

As one of the leading providers of wrap-up liability insurance in Toronto and the rest of Canada, KASE Insurance can help you set up this insurance policy for your project so that you can have peace of mind, knowing that the team involved in your project/s is covered by this all-encompassing insurance.

What Is Wrap-Up Liability Insurance?

A wrap-up liability insurance policy provides dedicated coverage that encompasses most (if not all) members of the team in the construction project. This can include the following:

• Contractors and subcontractors
• Project managers
• Architects and engineers
• Owners and developers

Generally, this type of insurance policy is a cost-effective financial risk management program for high-value projects (exceeding $5,000,000.)  This insurance policy may eliminate the need for every contractor and subcontractor to secure their own individual CGL policy. However, it is still an option to have both wrap-up liability insurance and commercial general liability insurance. In this scenario, wrap-up liability insurance can serve to cover the gaps in the individual CGL policies and possibly its insufficient limits.

Why Is Wrap-Up Liability Insurance so Important?

Without wrap-up liability insurance, each contractor in the construction project would need to provide their own policies. Specifically for larger projects, this may be not only confusing but may also present gaps in the coverage of the individual policies. Clearly, some standardization is required for projects like this. 

Wrap-up liability insurance presents the following advantages over the conventional practice of having individual CGL Insurance policies for each contractor:

Adequate Limit for All

Typically, the individual policies that contractors carry ranges from $1 million or more—but this could still vary per policy. With wrap-up liability insurance, you can have one common limit for the entire project and team, which is usually much higher. Additionally, with just a CGL

insurance policy, there is a possibility that a contractor’s limits may be eroded by the payment of claims from other projects. On the other hand, wrap-up liability insurance makes sure that there is a common limit for all and that this limit is dedicated to one project. 

Cost-Effectiveness

For high-value projects, the scale of this insurance policy alone can save money since it could take the place of individually paid CGL insurance policies. Furthermore, general liability insurance can be added in a wrap-up liability insurance policy to provide an easy-to-manage all-in-one policy to save time and money for everyone involved. 

Consistent Coverage

Wrap-up liability insurance gives consistent coverage with adequate limits for everyone involved in the particular project. This coverage could potentially reduce financial blows in case damage or loss occurs or emanates from the construction project.  

Straightforward Process for Claims

Particularly for claims that involve multiple parties, the process can get confusing with various CGL policies because of multiple adjusters. This could lead to the blame being passed around and would strain relationships in the team. 

What Does Wrap-Up Liability Insurance Cover?

Though each wrap-up liability insurance policy can be customized to the needs of your project, there are a number of risk protections that can be included in your wrap-up liability insurance policy including the following:

General Liability with a Broad Form Endorsement

This includes 2 main coverages. First is coverage for bodily injury inflicted on third-party individuals whether it’s on the project site or as a result of activities done in the project. Second is coverage for damage to third-party property that could be caused by anyone covered in the policy.

Builder’s Risk

This covers the building that is under construction from damages inflicted by fire, explosions, and extreme weather. But this is just the basic form of this coverage. Builder’s risk insurance can be extended to give coverage for water damage, theft, earthquakes, and more. 

Worker’s Compensation

This provides coverage for employees that sustain an injury, contracted an illness, or have died as a result of job-related activities.

Commercial Vehicle

This covers your vans, trucks, autos, and other specialty vehicles that are used for the project in the event that they are damaged or get involved in a crash that injures others.  

There are further add-on coverages that you can add to your wrap-up insurance policy, such as the following:

Pollution Liability

This provides coverage against pollution risks that could be caused or could emanate from the construction project. A few examples of these pollution risks are gas leaks, soil contamination, and water contamination. 

Railroad Protective Liability

This coverage is mandatory for any construction project that is carried out within 50 feet of any railroad-owned property. This protects against liabilities from damage to railroad-owned property like tunnels, tracts, underpasses, crossings, and the like. 

Contractor’s Equipment Floater

This provides coverage for the loss, damage, or destruction of equipment such as trailers, cranes, bulldozers, forklifts, and more. The covered losses can include vandalism, theft, fire, and water damage. 

Contractor’s Professional Liability

This provides coverage for liabilities for omissions or design errors. 

Who Needs Wrap-Up Liability Insurance?

As we’ve reiterated in the above sections, wrap-up liability insurance is best for construction projects that have a value of $5 million and above. This is also highly recommended for civil works projects such as dams, bridges, water mains, and etc. regardless of the project value.

This type of insurance can be set up to cover various members of the construction team including:

• Contractors and subcontractors
• Project managers
• Architects and engineers
• Owners and developers

Why Choose KASE Insurance?

In industries like construction, one can never be too prepared.  As one of the top insurance providers in Canada, KASE Insurance helps you in putting together the best insurance plan for you and your employees. We’ve got a great track record, being able to serve various clients from different industries. Along the way, we’ve gathered awards and have gotten a wealth of industry recognition. You can be sure that you are in good hands with KASE Insurance. 

Contact us today and let’s get started!