At Frank Crystal & Company, the members of our national Wrap-Up team have an average of 25 years and $34 billion of project-specific brokerage and administration experience. Additionally, with real-time information, our dedicated loss control and claims management experts typically achieve a 15-25% per-project loss ratio, which is notable as anything below 70% is considered successful in the industry. We help companies devise comprehensive risk transfer solutions for their construction exposures.

Construction contractors face significant and varied liability exposures, both during the performance of their work and after the completion of the job. Exposures, including contractual obligations, hold harmless clauses, indemnifications, residential defects, mold, and others, are all challenges that contractors face when trying to keep their risk management processes current. Up-to-date risk management practices are necessary in order to adequately protect contracting companies, regardless of whether they are publicly or privately owned.

To help our contractors stay current on these exposures, Frank Crystal & Company utilizes a process that focuses on the contractor’s total cost of risk. This process includes the following elements:

• Holistic approach to risk – risk identification, proper llocation, and treatment options
• Aggressive placement strategy – contractual analysis and prudent risk assumption practices
• Analyze exposure to major risk types – financial, hazard, operational and strategic.
In addition, Frank Crystal is focused on providing basic insurance services to our contractors which include

• Local brokerage expertise on all lines of coverage for contractors – including property/casualty and benefits
• Analysis and support of our clients’ safety management programs to help prevent potential losses
• Proactive handling of claims to help mitigate the ultimate cost

Larger construction projects have large amounts of liability exposure. Typically, the liability exposures are covered by the insurance of the individual subcontractors with indemnification and hold-harmless clauses in the contract protecting the owner or general contractor. However, large-scale construction projects, those with construction values of $70 million or more, have additional and more complex exposures. It may, therefore, be in the best interest of the owner or construction manager to purchase the liability insurance program for the entire project, so that the project is adequately protected against loss with common terms and conditions, while achieving economic efficiencies.

What is a Wrap-Up Insurance Program?

A Wrap-Up insurance program is a coordinated insurance program purchased by a financial sponsor, normally the owner or construction manager, for the benefit of all contractors performing work on the job site.

Types of Wrap-Up Programs

Owner Controlled Insurance Programs (OCIP) – The financial sponsor (i.e. building owner) purchases the insurance on behalf of most, if not all, contractors on the job.

Contractor Controlled Insurance Programs (CCIP) – The general contractor/construction manager purchases the insurance on behalf of most, if not all, contractors on the job.

Rolling Wrap-Up– The financial sponsor - owner/general contractor purchases the insurance for a series of construction projects on behalf of most, if not all, contractors on the job. Typically, this type of program is implemented when there are a series of capital improvement projects at multiple locations over a period of time (i.e. 3-5 years) and where the total capital investment is in excess of $75 million.

Residential – The financial sponsor – owner/general contractor purchases general and excess liability coverages for all contractors on the job.

Wrap Up Brokerage Services – Because of the level of risk involved in large-scale construction projects, it is important to choose an insurance broker with extensive wrap-up experience, as each project has its own unique risks. Failure to recognize all risks can leave the owner or contractor exposed to substantial financial loss.

One of the critical factors in the success of a Wrap-Up program is the quality of the RMIS (Risk Management Information System), which captures real-time information, such as losses. In large construction projects, losses typically represent 70% or more of the total cost of risk (total cost of risks is equal to the insurance premiums plus losses). Our RMIS is a state-of-the-art project management information system.