What Is Wrap-Up Liability Insurance?

Contractor-Controlled Insurance or Owner-Controlled Insurance?

There are two kinds of wrap-up liability insurance policies: contractor- and owner-controlled. 

Contractor-controlled wrap-up liability insurance is purchased by the general contractor leading the project. It extends protection to all contractors and subcontractors hired to work on the project. 

Similarly, an owner-controlled wrap-up liability policy covers all the contractors involved in a construction project, but it is bought by the property owner. 

Another option is for a property owner and general contractor to jointly purchase a wrap-up policy, making it a partner-controlled insurance policy. The difference is that the sponsors of a partner-controlled policy share the protection and benefits.

What Are the Benefits of a Wrap-Up Liability Insurance Policy?

There are a few benefits to you and your team in purchasing a wrap-up liability policy, including:

• A single wrap-up liability policy removes the risk of coverage gaps or insufficient coverage limits across multiple policies. In other words, it’s better, more effective coverage for all.

• Wrap-up liability insurance provides a simplified claims management process, streamlining any claims submitted to your insurance provider.

• Because a wrap-up policy involves bundling multiple coverages together, there are usually premium savings to be had. 

• Typically, higher coverage limits are available for all contractors listed on the policy.

• General contractors don’t need to fret about monitoring all their subcontractors’ certificates of insurance. 

What Does an Owner-Controlled Wrap-Up Policy Cover?

An owner-controlled wrap-up insurance policy typically includes the following:

• Commercial general liability (CGL) insurance
• Workers’ compensation
• Builder’s risk insurance
• Professional liability insurance
• Umbrella commercial insurance

Additional optional coverage can be included, such as pollution liability insurance. However, other types of insurance, like commercial auto insurance, are not included in an owner-controlled wrap-up policy. 

What Does a Contractor-Controlled Wrap-Up Policy Cover?

Like an owner-controlled wrap-up liability policy, a contractor-controlled policy usually provides the same type of protection.

However, a general contractor may prefer a contractor-controlled policy because it may cost less than an owner-controlled policy and offer higher coverage limits, particularly if the contractor has a good relationship with their insurance provider and a favourable claims history. In turn, the property owner reaps the benefit of the lower premium and higher coverage limits.

Moreover, if the general contractor owns the policy, the property owner is more inclined to stay the course and not hire a different contractor to take over the existing construction project. 

What Is the Difference Between a Wrap-Up Policy and Builder’s Risk Insurance?

A builder’s risk insurance policy (also called course of construction insurance) is a must-have for contractors, but it cannot provide the same amount of protection as a wrap-up policy. 

Builder’s risk insurance covers the property under construction and the tools and equipment at the job site. It does not include general liability protection. 

However, general liability coverage can be added to a builder’s risk policy. Additionally, as it is included in a wrap-up liability policy if yours is a large, complex construction project, a standalone builder’s risk policy may be insufficient to cover your risks.

How to Get Wrap-Up Liability Insurance

Regardless of the type of wrap-up liability coverage you require for your construction project, Zensurance makes it quick and easy to get the protection you and your team need.

More than 350,000 Canadian small business owners and independent professionals trust Zensurance for their customized liability insurance needs.

Fill out an online application to get a free quote. 

Our licensed brokers can answer your questions and help you manage your risk to ensure your project has the solid foundation it needs.

– Updated April 23, 2025.