A wrap-up insurance program is a single insurance structure that provides general liability, workers' compensation, and (often) excess/umbrella coverage to all enrolled parties on a specific construction project — instead of each contractor, subcontractor, and supplier providing its own policies.
Wrap-ups deliver three core benefits to large California construction projects: cost savings through single-buyer economics and elimination of layered overhead, coverage consistency so every enrolled party has the same limits and terms, and dispute control because all claims go to a single program rather than triggering tender disputes between multiple carriers.
The two delivery structures are OCIP and CCIP, distinguished by who sponsors the program.
OCIP — Owner-Controlled Insurance Program
In an OCIP, the project owner or developer sponsors and purchases the wrap-up coverage. The owner pays the premium up front, then deducts each enrolled contractor's insurance cost from their bid (called a "credit-back" or "insurance credit").
Typical OCIP scenarios in California:
- A real estate developer building a $50M+ multifamily project
- A REIT or institutional owner managing capital construction across a portfolio
- A public agency on a large infrastructure project
- A school district building a new campus
The owner retains program control: choice of carrier, coverage terms, claims management, and the loss-sensitive risk-financing structure (deductibles, retentions, captives).
CCIP — Contractor-Controlled Insurance Program
In a CCIP, the general contractor or construction manager sponsors the wrap-up. The GC pays the premium and either absorbs the cost into its overhead/fee structure or charges the owner through change-order or direct billing.
Typical CCIP scenarios in California:
- A large GC running 4–10 simultaneous mid-size projects under one master program
- A design-builder bundling insurance into its turnkey delivery
- A GC managing risk across multiple owners (public + private mix)
The GC retains program control, which is operationally cleaner because the GC already manages all subcontractor enrollment, certificates, payroll audits, and claims through its day-to-day construction administration anyway.
Side-by-side comparison
- Sponsor: OCIP = owner / developer • CCIP = GC / construction manager
- Best for: OCIP = single large project ($25M+) • CCIP = multi-project portfolio or large single project ($50M+)
- Cost recovery: OCIP = owner deducts insurance from subs' bids • CCIP = GC bills owner or absorbs into fee
- Carrier & claims control: Owner-appointed TPA (OCIP) vs. GC-appointed TPA (CCIP)
- Loss-sensitive option: Common in both at scale (large deductible, captive)
- California public works compatibility: Both work, subject to DIR rules
Coverage typically included in a wrap-up
- Commercial general liability — primary $1M/$2M per project, often layered to $25M-$50M+ via excess/umbrella
- Workers' compensation — statutory California limits with employer's liability layered
- Completed operations — extended for the duration of the California statute (4 years visible / 10 years latent defect for residential construction)
- Builders Risk — sometimes included, more often placed separately
- Pollution liability — increasingly common addition for projects with environmental exposure
Typically not included: auto, professional liability (architect / engineer E&O), and equipment floater. Each enrolled contractor retains these as its own coverage.
When a wrap-up makes economic sense
Wrap-ups have material fixed costs — broker fees, program admin, certificate management, payroll audits, claims TPA setup. The break-even project size varies, but rules of thumb in California:
- OCIP break-even: ~$25M+ in construction value, or $5M+ in projected wrap-up premium
- CCIP break-even (single project): ~$50M+, or a multi-project rolling program covering $100M+ in construction annually
Below those thresholds, the layered traditional-coverage model (each contractor providing its own GL/WC) is usually cheaper after fixed costs are accounted for.
California-specific wrap-up considerations
- Residential exclusions. Many California wrap-up carriers either exclude or heavily restrict residential construction because of the 10-year latent defect statute (Calderon, SB 800). Wrap-ups for condo or for-sale residential need specialty markets.
- DIR Public Works compliance. OCIPs on California public works projects must be registered with DIR and the program's WC structure must be approvable by California DIR's prevailing wage division.
- Prevailing wage and workers' comp. California prevailing wage rules add complexity to wrap-up payroll auditing because per-job and per-class-code reporting is required.
- Independent contractor / AB 5. Wrap-ups need to define enrollment scope clearly around the ABC test for who is an "employee" vs. "independent contractor" — affects WC enrollment.
Wrap-ups aren't a retail-broker product — they require specialty surplus lines markets, captive program access, and TPAs that handle multi-party claims. Thrive places wrap-up programs for California projects through admitted and surplus lines markets and specialty programs not open to most retail brokers.
Frequently asked questions
What's the practical difference between OCIP and CCIP?
An OCIP is bought by the project owner; a CCIP is bought by the general contractor. The coverage is essentially the same. The difference is who controls the program and who absorbs the administrative work.
What size project justifies a wrap-up?
OCIPs generally break even at ~$25M+ in construction value. CCIPs run economically at $50M+ per project or as a rolling program covering $100M+ in annual construction.
Can subcontractors decline to enroll in a wrap-up?
Generally no — once the owner or GC sets the wrap-up as a project condition, subs either enroll and have their GL/WC premium credited back, or they don't bid the work.
Are wrap-ups available for California residential construction?
They exist but the market is narrower than for commercial because California's 10-year latent defect statute (SB 800 / Calderon) creates extended tail liability that most wrap-up carriers price heavily for or exclude entirely.
Who handles claims on a wrap-up?
A designated third-party administrator (TPA) hired by the program sponsor (owner for OCIP, GC for CCIP). The TPA processes all GL and WC claims under the wrap-up regardless of which enrolled party was involved.
Does workers' comp work the same way under a wrap-up?
Yes for coverage, but the experience modification (X-Mod) treatment differs — wrap-up payroll usually doesn't count toward the contractor's regular X-Mod because the wrap-up has its own X-Mod calculation. This can be a positive or negative depending on the contractor's claim history.
How long does completed operations stay in force after a wrap-up project ends?
Typically purchased as an extended tail matching California's statute — 4 years visible / 10 years latent defect for residential work. Commercial completed-ops is typically 4 years.