Wrap-Up Insurance (OCIP/CCIP): Reading the Subcontract's Insurance Article

A wrap-up insurance program consolidates liability coverage for a project under a single policy that enrolls the participating trades. When the owner sponsors it, it is an Owner-Controlled Insurance Program (OCIP); when the general contractor sponsors it, a Contractor-Controlled Insurance Program (CCIP). The sponsor buys general liability, and often excess and workers' compensation, covering all enrolled subcontractors for their on-site work on that one project. The aim is uniform limits, volume pricing, and fewer coverage disputes between trades after a loss.

For an enrolled subcontractor, the wrap typically replaces its own commercial general liability coverage for the enrolled scope — its operations on that project are insured under the sponsor's program rather than its own policy.

Because the wrap covers the subcontractor's insurance for the enrolled work, the subcontractor is no longer paying for that coverage out of its own program — and the subcontract should account for it with an insurance-cost credit, often called the deduct. The sponsor effectively recovers the premium by deducting the sub's insurance cost from the contract price. The figure should be fair: it should reflect the actual cost of the coverage the wrap replaces, not an inflated estimate that quietly transfers value to the sponsor.

Subcontractors sometimes accept a deduct without scrutiny. Confirm what the credit is and how it was calculated, because an excessive deduct is simply a price reduction dressed as an insurance arrangement.

Wraps are project-specific and rarely cover everything. Common exclusions include off-site work (fabrication, storage, your shop), automobile liability, tools and equipment, and products/completed-operations coverage beyond a defined tail period after the project closes. A subcontractor must keep its own insurance in force for everything outside the wrap, and must confirm the completed-operations tail is long enough to cover latent-defect claims that surface years later. Coverage that ends too soon can leave the sub personally exposed for work the wrap appeared to insure.

Enrollment is also conditional: wraps require the sub to enroll, report payroll, and follow the project safety program. Failing those conditions can put coverage at risk precisely when it is needed.

Confirm whether the project is wrap-enrolled, what the wrap covers and excludes, the limits and the completed-operations tail, and what insurance you must still carry on your own. Verify the insurance-cost deduct is reasonable and reconciled to the coverage it replaces, and check the enrollment and reporting conditions you must meet.

Wrap provisions sit in the insurance article and the exhibits and carry both a coverage question and a pricing question. A first-pass review should surface both — the gaps you still need to insure, and whether the deduct against your price is fair — before your team signs.