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![Page 1: Objectives Understand ideal coverage under wrap- ups Understand difference in coverage between corporate and wrap-up insurance programs Identify potential.](https://reader036.fdocuments.net/reader036/viewer/2022062511/551c0e97550346a84f8b52cd/html5/thumbnails/1.jpg)
ObjectivesUnderstand ideal coverage under wrap-ups
Understand difference in coverage between corporate and wrap-up insurance programs
Identify potential gaps created by Length of coverage Location of coverage Exclusions (corporate and wrap-up)
“WRAP TRAPS”
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“WRAP TRAPS”
Avoiding Gaps in Coverage
Coverage Gap
Wrap-up Insurance
Corporate Insurance
Liability
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“WRAP TRAPS”
Potential Gaps
Scope
Project location description Off-site exposures
Length of coverage Completed operations
Who should be enrolled?
Limits and deductibles
Coverage
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“WRAP TRAPS”
Potential GapsExclusions
Asbestos and Nuclear
EIFS
Professional Liability/ Architects & Engineers
Pollution Except Hostile Fire
Automobile Liability
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“WRAP TRAPS”
Coverage Provided By Enrolled Contractor
Wrap-Up Corporate
Certificate Certificate
WC On-site Off-site
GL On-site Off-site
Auto No Coverage On- & Off-site
Umbrella On-site Off-site
REQUIRED ENDORSEMENTS
Additional Insured
Primary/Noncontributory
Cancellation Amendment
Waiver of Subrogation
Per Project Aggregate
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“WRAP TRAPS”
Corporate insurance policy covers completed operations for
that policy year only
Completed OperationsProject Period
Policy Year 13Multiple Policies/Various Rates
Corporate Insurance Policy
Year 1Policy Year 2
Policy Year 3
3-Year C/O
Policy Years 1-3
Policy Year 6
Policy Year 13
Wrap-up Insurance
One Policy/Fixed Rate
Completed Operations
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“WRAP TRAPS”
Excludes Wrap-up project by name Blanket wrap-up exclusion
ORCovers Period beyond completed operations Above wrap-up limits Insolvent wrap-up May drop down if wrap-up excludes
coverage
Corporate CGL Policy
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“WRAP TRAPS”
Completed Operations Completed OperationsProject Period
Policy Year 13Multiple Policies/Various Rates
Corporate Insurance Policy
Year 1Policy Year 2
Policy Year 3
3-Year C/O
Wrap-up Insurance
One Policy/Fixed Rate
Policy Years 1-3
Policy Year 6
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“WRAP TRAPS”
Corporate CGL Endorsement #1
“ongoing operations or operations included in the ‘products-completed operations hazard’ … as a consolidated insurance program has been provided.”
Corporate insurance may cover completed operations period from year 3 through year 13
Excludes:
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“WRAP TRAPS”
Completed Operations Completed OperationsProject Period
Policy Year 13Multiple Policies/Various Rates
Corporate Insurance Policy
Year 1Policy Year 2
Policy Year 3
3-Year C/O
Wrap-up Insurance
One Policy/Fixed Rate
Corporate insurance may cover completed operations period from year 3 through year 13
Policy Years 1-3
Policy Year 6
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“WRAP TRAPS”
“any Wrap-Up that You are or ever were involved in.”
Corporate CGL Endorsement #2
Corporate insurance will not cover any claim in year 3 through year 13
Excludes:
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“WRAP TRAPS”
Completed Operations Completed OperationsProject Period
Policy Year 13Multiple Policies/Various Rates
Corporate Insurance Policy
Year 1Policy Year 2
Policy Year 3
3-Year C/O
Wrap-up Insurance
One Policy/Fixed Rate
Corporate insurance will not cover any claim in year 3 through year 13
Policy Years 1-3
Policy Year 6
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“WRAP TRAPS”
“Wrap-Up… in which You are, were, or became a participant”
Corporate CGL Endorsement #3
Corporate insurance will cover any claims in year 3 through year 13 along with any excess
coverage during construction
Excess to:
Best coverage possibleProvides coverage on a DIC basis Can be provided (ask!)
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“WRAP TRAPS”
Completed Operations Completed OperationsProject Period
Policy Year 13Multiple Policies/Various Rates
Corporate Insurance Policy
Year 1Policy Year 2
Policy Year 3
3-Year C/O
Wrap-up Insurance
One Policy/Fixed Rate
Corporate insurance will cover any claims in year 3 through year 13 along with any excess
coverage during construction
Policy Years 1-3
Policy Year 6
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“WRAP TRAPS”
On-site/Off-siteOff-site
Storage Area
Contractor’s Office
Lay Down Area
Staging Facility
Lay Down AreaLay Down Area
Staging Facility
Lay Down Area
Staging Facility
Storage Area
Project Address
On-site
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“WRAP TRAPS”
Lay Down Area Incident
Sub (Employer)
Lay Down Area
Project AddressEmployee
injured moving material
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“WRAP TRAPS”
Issues to Consider Definition of project site cannot be
overlooked and must consider how the project will be executed
Laydown Area Incident
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“WRAP TRAPS”
Issues to Consider AI and indemnity issues still a factor with
wraps There may be coverage for unenrolled
subs Need to balance whether to enroll off-site
subs
Unenrolled Subcontractor
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“WRAP TRAPS”
Damage from Warranty Work (OCIP)
GC
Developer(Sponsor)
Electrical SubHOA/Unit
Owner
PD Suit against Electrical Sub
PD Suit against
Electrical Sub
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“WRAP TRAPS”
Damage From Warranty Work
10/1/05
11/30/05
5/30/06
Electrical Sub works on floors 1-10
12/1/05 Electrical Sub works on floors 11-40
2/22/06HOA/Unit Owner/Developer sue Electrical Sub for PD
1/15/06 Electrical Sub warranty work damages sprinkler- PD: floors 1-9
12/7/05 Unit Owner on floor 9 requires electrical warranty work
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“WRAP TRAPS”
Issues to Consider The structure of wrap-up policies vs.
traditional policies can affect coverage
Damage from Warranty Work
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“WRAP TRAPS”
“Adequate” Limits Defense within limits Limits shared by all insureds; possibly
multiple projects
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“WRAP TRAPS”
Exclusions Read exclusions carefully (including
endorsements) Avoid cross-liability exclusion Avoid mold exclusion