Wrap-Up (OCIP / CCIP)
Also known as: OCIP, CCIP, Wrap-Up Insurance, Controlled Insurance Program, CIP
A wrap-up, formally a controlled insurance program (CIP), is a single consolidated insurance package that "wraps" most or all of the contractors and subcontractors on a large construction project into one set of policies — typically general liability, workers compensation, and excess/umbrella. When the project owner sponsors and buys the program it is an Owner-Controlled Insurance Program (OCIP); when the general contractor sponsors it, it is a Contractor-Controlled Insurance Program (CCIP). The sponsor purchases coverage centrally, and each enrolled contractor is insured under it for their work on that specific site.
Wrap-ups matter to a small subcontractor because enrollment changes how you bid. Since the wrap-up now insures your on-site liability and workers-comp exposure, you are expected to deduct the cost of that coverage from your bid — sponsors audit payroll to calculate the credit. The upside is broad, consistent limits and a single point of claims handling across the whole job; the downside is that a wrap-up only covers work performed at the enrolled site, so you still need your own "practice" policy for every other project, plus coverage for tools and mobile equipment the wrap does not touch. Large projects sometimes pair a wrap-up with subcontractor default insurance to manage performance risk separately.
The most important nuance is the completed-operations term. Construction-defect claims surface years after a building opens, so the wrap-up's extended completed-operations coverage — and any completed operations tail — should be negotiated to match the state's statute of repose, often up to ten years. Watch for sunset clauses that end the tail early, gaps between the wrap-up's expiration and your own policy, and residential wrap-ups, which some insurers restrict because of heavy defect litigation. Always obtain a copy of the actual wrap-up manual, not just a certificate, before signing the subcontract.
Real-world scenario
Meridian Crossing Developers LLC is building a $180,000,000 mixed-use tower and elects to sponsor an Owner-Controlled Insurance Program (OCIP) covering every enrolled contractor on the jobsite. Instead of each of the 40+ subcontractors carrying its own policy, Meridian buys one wrap that provides general liability at $2,000,000 per occurrence and a $4,000,000 general aggregate, plus workers' compensation at statutory limits with $1,000,000 employers' liability. The wrap premium is $4,200,000, calculated against $45,000,000 of enrolled construction payroll. Because subs no longer insure their own site exposure, Meridian requires them to deduct their insurance cost from their bids — a total credit of $3,600,000 that offsets much of the wrap cost.
The program carries a $250,000 self-insured retention per claim, so Meridian funds a loss fund for smaller losses. Mid-project, an ironworker falls from a scaffold and suffers a spinal injury. Workers' comp pays $650,000 in medical and indemnity, and a third-party liability suit is defended under the wrap with $120,000 in legal costs before settling for $850,000. Because the combined loss exceeds the retention, the wrap carrier absorbs the excess. Meridian's $10,000,000 umbrella sits above the wrap in case a catastrophic event pierces the primary limits.
At project close, a premium audit reconciles actual payroll against the $45,000,000 estimate; because payroll came in lower, Meridian receives a $180,000 return premium. Critically, the wrap includes a 10-year completed-operations extension so that a defect claim filed years after occupancy — say a $1,200,000 water-intrusion suit — still finds coverage.
How it affects your premium
Wrap-up pricing is driven less by traditional class rates and more by the size, duration, and risk profile of the single construction project it insures:
- Total enrolled payroll: The workers' compensation portion is rated on construction payroll, so a labor-intensive high-rise costs far more than an equal-dollar equipment-heavy project. See workers' compensation.
- Hard construction cost and project duration: A $180M multi-year build enrolls more trades and accrues more exposure-hours than a fast-track $20M job, raising both premium and the length of the completed-operations tail.
- Completed-operations extension length: Buying a 10-year completed operations tail to match statutes of repose materially increases cost versus a 2- or 3-year tail.
- Project type and defect severity: Residential condos and habitational work carry heavy construction-defect litigation risk and are surcharged or excluded; roads and infrastructure price lower.
- Retention / deductible level: A higher self-insured retention lowers premium but shifts frequency losses onto the sponsor's loss fund.
- Aggregate structure: Whether the program provides a per-project aggregate that reinstates limits affects both protection and price.
- Loss history and safety program: The sponsor's experience modifier and documented site-safety controls directly move the WC and GL rates.
Common misconceptions
Myth: A wrap-up means my subcontractors don't need any of their own insurance.
Reality: Wraps only cover on-site operations for enrolled work; subs still need coverage for off-site work, tools, autos, and any operations excluded from the wrap. Owners should still require an additional insured status and certificates for those residual exposures.
Myth: Once the project is finished, the wrap keeps protecting me forever.
Reality: Primary coverage ends at substantial completion; long-tail defect claims are only covered if you purchased a completed operations tail, and only for the number of years you bought.
Myth: OCIP and CCIP are basically the same thing with different names.
Reality: The difference is who sponsors and controls the program: in an OCIP the owner sponsors it, while in a CCIP the general contractor does. That controls who receives credits, owns the loss fund, and negotiates the wrap terms — including any subcontractor default arrangements.
Frequently asked questions
What is the difference between an OCIP and a CCIP?
What coverages are typically included in a wrap-up?
Do subcontractors still bid their insurance costs when there is a wrap?
Why do wrap-ups need a completed-operations extension?
Are wrap-ups only worth it on large projects?
Sources cited
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