🛡️ Wrap-Up Insurance (OCIP/CCIP) Guide
On large construction projects — typically $50M and up — you'll encounter wrap-up insurance programs. These programs consolidate insurance coverage under a single policy controlled by either the owner (OCIP) or the general contractor (CCIP). They can save the project significant money on insurance costs, but they fundamentally change how you bid, manage risk, and handle claims.
Key Principle
When you're enrolled in a wrap-up, you must remove your insurance costs from your bid — but not your risk. You're covered by the wrap-up policy for on-site work, but you're still responsible for off-site operations, your vehicles, and your professional liability. Understanding what's covered and what's not is the key to bidding wrap-up projects correctly.
What Is Wrap-Up Insurance?
A wrap-up insurance program provides a single insurance policy that covers all (or most) contractors and subcontractors working on a specific project.
OCIP vs. CCIP
| Feature | OCIP (Owner Controlled) | CCIP (Contractor Controlled) |
|---|---|---|
| Policy holder | Project owner | General contractor |
| Who buys the policy | Owner | GC |
| Who pays premiums | Owner (directly) | GC (built into GC's contract) |
| Enrolled parties | GC + all subs | All subs (GC already has policy) |
| Who manages the program | Owner's insurance broker/administrator | GC's insurance broker/administrator |
| More common on | Large public projects, institutional | Large private projects, GC-led |
What a Wrap-Up Typically Covers
| Coverage | Included? | Details |
|---|---|---|
| General liability (GL) | Yes | On-site operations for enrolled contractors |
| Workers' compensation | Often yes | On-site injuries for enrolled workers |
| Excess/umbrella liability | Yes | Higher limits than individual policies |
| Completed operations | Yes | Claims arising after completion (typically 3–10 years) |
| Builder's risk | Sometimes | Property damage to the work in progress |
| Professional liability | Usually no | Design errors — architects/engineers carry their own |
| Auto liability | No | Each contractor carries their own auto |
| Off-site operations | No | Your own policy covers off-site fabrication, storage, etc. |
| Tools and equipment | No | Your own inland marine / equipment floater |
How Wrap-Ups Work
The Enrollment Process
- Bid phase — Bid documents specify that the project is a wrap-up (OCIP or CCIP)
- Insurance deduction — You remove specified insurance costs from your bid (GL, WC)
- Award — You're awarded the contract
- Enrollment — You enroll in the wrap-up program through the administrator
- Certificates — You receive a certificate of insurance under the wrap-up policy
- Work — You perform work covered by the wrap-up policy
- Claims — Any on-site incidents are reported through the wrap-up program
- Closeout — At project completion, you're unenrolled and your own policies resume full coverage
What You Remove from Your Bid
The most critical — and most confusing — part of bidding a wrap-up project:
| Cost to Remove | How to Calculate |
|---|---|
| General liability premium | Your current GL rate × estimated project payroll (or receipts) |
| Workers' comp premium | Your current WC rate × estimated project payroll |
| Excess/umbrella (if included) | Allocated portion of your umbrella premium |
| Cost to KEEP in Your Bid | Why |
|---|---|
| Auto insurance | Not covered by wrap-up |
| Off-site GL | Not covered — fabrication shop, storage yard |
| Inland marine / equipment | Not covered |
| Professional liability | Not covered |
| Remaining overhead | Insurance admin is reduced but not eliminated |
| Safety costs | You're still responsible for your safety program |
Don't Over-Deduct
The biggest mistake contractors make on wrap-up bids is removing too much from their price. You should only deduct the specific insurance costs that the wrap-up replaces. Remove too much and you're effectively cutting your profit. Remove too little and your bid isn't competitive. Get your insurance broker's help to calculate the exact deduction.
Bidding a Wrap-Up Project
Step-by-Step Bid Adjustment
Example: Your normal bid on this project would be $5,000,000
| Step | Calculation | Amount |
|---|---|---|
| 1. Calculate project labor (payroll) | Estimated payroll for this project | $2,000,000 |
| 2. Calculate GL deduction | GL rate: $15 per $1,000 of payroll → $2M × $15/$1K | $30,000 |
| 3. Calculate WC deduction | WC rate: $12 per $100 of payroll → $2M × $12/$100 | $240,000 |
| 4. Calculate umbrella deduction (if applicable) | Allocated share | $5,000 |
| 5. Total insurance deduction | GL + WC + Umbrella | $275,000 |
| 6. Adjusted bid | $5,000,000 - $275,000 | $4,725,000 |
What to Watch Out For
| Issue | Details |
|---|---|
| Minimum/maximum deduction | Some programs specify a percentage range (e.g., 3–8% of contract) |
| Deduction verification | The program administrator may audit your deduction calculation |
| Subcontractor deductions | Your subs must also deduct — ensure their bids reflect this |
| Retained insurance costs | Budget for your own coverage on off-site work, autos, and equipment |
| Safety incentives/penalties | Some wrap-ups have loss-sensitive components — your claims affect costs |
Coverage Details
What's Covered (On-Site)
| Scenario | Covered by Wrap-Up? |
|---|---|
| Worker falls on the jobsite | Yes (WC component) |
| Third party injured on site by your operations | Yes (GL component) |
| Property damage to other contractors' work from your operations | Yes (GL component) |
| Completed operations claim (post-construction defect) | Yes (completed operations tail) |
| Subcontractor's worker injured on site | Yes (if enrolled) |
What's NOT Covered
| Scenario | Your Responsibility |
|---|---|
| Worker injured at your shop/yard (off-site) | Your own WC policy |
| Auto accident on the way to the site | Your own auto policy |
| Damage to your tools and equipment on site | Your inland marine policy |
| Design error (if you have design responsibility) | Your professional liability |
| Pollution/environmental damage | May need separate policy |
| Work at a different project (same time period) | Your own GL and WC |
| Warranty work after the completed operations period | Your own coverage |
Workers' Compensation in Wrap-Ups
How Wrap-Up WC Works
| Feature | Details |
|---|---|
| Coverage | All on-site workers of enrolled contractors |
| Payroll reporting | You report payroll to the wrap-up administrator (separately from your own WC carrier) |
| Claims | Report on-site injuries through the wrap-up claims process |
| Your own WC policy | Must maintain your own policy for off-site operations and non-enrolled projects |
| EMR impact | Claims under the wrap-up may or may not affect YOUR experience mod (depends on program structure) |
Ask About EMR Impact
Before enrolling, ask how claims will be charged:
- "Wrapped" claims stay with the wrap-up program — they don't affect your EMR
- "Unwrapped" claims are charged back to your own policy — they do affect your EMR
This can significantly impact your future insurance costs. Get clarity in writing.
Payroll Separation
You must separate your payroll reporting:
| Payroll Category | Reported To |
|---|---|
| On-site project payroll | Wrap-up administrator |
| Off-site payroll (shop, travel, other projects) | Your own WC carrier |
| Mixed payroll (employee works on-site and off-site) | Split — on-site hours to wrap-up, off-site hours to your carrier |
Claims Management
Reporting Claims
| Step | Details |
|---|---|
| 1. Incident occurs on site | Provide immediate medical attention |
| 2. Report to wrap-up administrator | Usually within 24 hours (check program requirements) |
| 3. Complete incident documentation | Program-specific forms (may differ from your normal process) |
| 4. Cooperate with investigation | Program adjusters handle the claim |
| 5. Track the claim | Monitor status through the program |
Loss-Sensitive Programs
Some wrap-ups have a loss-sensitive or retrospective component:
| Feature | Impact |
|---|---|
| Loss fund | Contractors contribute to a loss fund; unused funds may be returned |
| Incentive programs | Safety bonuses for contractors with zero or low claims |
| Penalty programs | Higher deductibles or additional charges for contractors with high claims |
| Retroactive adjustments | Your final wrap-up cost may be adjusted based on actual losses |
Subcontractor Management Under Wrap-Ups
Your Responsibilities as a GC or Higher-Tier Sub
| Task | Details |
|---|---|
| Notify subs | Include wrap-up requirements in your bid invitations and subcontracts |
| Verify enrollment | Ensure all eligible subs are enrolled before starting work |
| Insurance deductions | Ensure subs deduct appropriate insurance costs from their bids |
| Payroll reporting | Collect and submit sub payroll data to the wrap-up administrator |
| Compliance | Ensure subs follow wrap-up safety and claims reporting requirements |
| Excluded subs | Some subs may be excluded (too small, hazardous operations, etc.) — they carry their own insurance |
Typical Enrollment Thresholds
| Contractor Size | Enrollment Status |
|---|---|
| Over $100K subcontract | Enrolled (mandatory) |
| $25K–$100K subcontract | May be enrolled or excluded (program-specific) |
| Under $25K subcontract | Usually excluded |
| Suppliers / material vendors | Excluded (not performing on-site labor) |
| Trucking / hauling | Usually excluded |
Best Practices
For Estimating Wrap-Up Projects
- Get your insurance broker involved early — they should calculate your exact deduction
- Don't guess at deduction percentages — calculate based on your actual rates and estimated payroll
- Account for off-site insurance costs that the wrap-up doesn't cover
- Include administrative costs for wrap-up compliance in your overhead
- Factor in safety program costs (wrap-ups often have enhanced safety requirements)
- Review the wrap-up manual before finalizing your bid
For Project Execution
- Enroll before starting any on-site work
- Separate payroll tracking for on-site vs. off-site hours
- Report all on-site injuries through the wrap-up process — not your own carrier
- Submit monthly payroll reports to the administrator on time
- Maintain your own insurance for everything the wrap-up doesn't cover
- Keep enrollment certificates on file for the project duration
- Ensure subcontractors are enrolled and compliant
For Claims
- Report incidents within 24 hours (or per program requirements)
- Use the wrap-up program's forms and process — not your own carrier's
- Document everything — photos, witness statements, medical reports
- Verify whether claims impact your EMR or stay with the program
- Cooperate with wrap-up adjusters and investigators promptly
Common Wrap-Up Mistakes
| Mistake | Impact |
|---|---|
| Not deducting enough insurance | Your bid is too high — you lose the project |
| Deducting too much | Your bid is too low — you lose money |
| Not enrolling before starting work | You're uninsured for on-site operations |
| Reporting claims to your own carrier | Claim charged to your EMR instead of the wrap-up |
| Not separating payroll | Overpaying your own WC carrier for wrapped payroll |
| Subs not enrolled | Uninsured subs create exposure for everyone |
| Ignoring off-site coverage gaps | Your shop, yard, and vehicle operations aren't covered |
| Not reading the wrap-up manual | Missing program-specific requirements and deadlines |
Related Resources
- Insurance Guide — General construction insurance overview
- Workers' Comp Guide — EMR and experience modification
- Government Contracts Guide — Wrap-ups on public projects
- Bonding Guide — Bonding requirements on wrap-up projects
- Labor Burden Explained — How wrap-ups affect your burden calculation