You bid a large commercial or public construction project. The GC or owner sends you an enrollment packet for their Owner Controlled Insurance Program (OCIP) or Contractor Controlled Insurance Program (CCIP). The packet is 30 pages. The coverage schedule references policies you have never heard of. The enrollment form asks for your current insurance costs so they can calculate your bid credit. And you are expected to sign within 72 hours.
Wrap-up programs exist for legitimate reasons. They can eliminate coverage gaps on a specific project, reduce the number of insurers responding to a single project loss, and reduce costs for large projects when structured well. But for subcontractors, they create compliance complexity and real financial risk if you do not understand what is covered, what is excluded, and how to handle the bid credit without undercutting yourself.
OCIP vs. CCIP: The One Difference That Matters
The structural difference is straightforward:
- OCIP (Owner Controlled Insurance Program): The project owner purchases the program. The owner's risk management team or their broker administers it. All enrolled contractors and subcontractors are covered under the owner's policies for work on this specific project site.
- CCIP (Contractor Controlled Insurance Program): The general contractor purchases and administers the program. The GC's broker typically manages enrollment and claims. Coverage structure is similar, but the GC is the program administrator.
For most subcontractors, the day-to-day experience of being enrolled in an OCIP vs. CCIP is similar. The difference matters most when claims occur and when the program terminates. An OCIP's completed operations tail coverage runs on the owner's policy; a CCIP's depends on the GC maintaining the program after project completion.
What a Wrap-Up Program Covers
Wrap-up programs typically cover the following for enrolled subcontractors. Verify against the specific program documents because terms vary:
- Commercial General Liability for on-site operations: The wrap provides GL coverage for bodily injury and property damage arising from your work at the enrolled project site. This is the core value of a wrap-up to a subcontractor.
- Completed operations tail: A tail period of GL coverage for claims arising after the project is complete. Tail periods are specified in the program, commonly two to five years post-completion, sometimes longer for certain project types.
- Builder's Risk (property): The wrap typically includes builder's risk coverage for the project during construction.
Workers comp is almost never included in a wrap-up. Despite being a major cost driver, workers' compensation is rarely part of OCIP or CCIP programs. You are responsible for your own workers' comp coverage on wrap-up projects. The enrollment forms will ask for your workers' comp carrier and policy information to confirm you have it, not to replace it.
What a Wrap-Up Program Does NOT Cover
The wrap covers on-site operations at the enrolled project only. It does not cover:
- Off-site fabrication and operations: Work at your shop, in transit, or at any location other than the enrolled project site is not covered by the wrap.
- Commercial auto: Your vehicles driving to and from the site are not covered. You need your own commercial auto policy.
- Workers compensation: Almost never included. Carry your own.
- Your owned equipment: The wrap's property coverage protects the project under construction, not your tools and equipment. Your contractor's equipment policy covers your gear.
- Unenrolled subcontractors of yours: If you hire second-tier subs who are not enrolled in the wrap, you have the same certificate compliance obligation as on any other job.
- Work outside the enrolled project boundaries.
The Bid Credit: How It Works and Where Subs Miscalculate
When you bid on a wrap-up project, the enrollment process includes calculating a bid credit — a reduction in your bid price to reflect that the project owner or GC is providing GL coverage for the project and you do not need to include your own GL cost in your bid price.
How the bid credit is typically calculated
You will be asked to provide your current insurance cost per $1,000 of payroll for the coverages the wrap replaces, usually GL and sometimes builder's risk. The bid credit formula applies that rate to your estimated on-site payroll for the project.
Example: If your GL rate is $8 per $1,000 of payroll and your estimated on-site payroll for the project is $500,000, the bid credit is $4,000. You reduce your bid by $4,000 to reflect the GL coverage you are receiving from the wrap.
The common mistake: over-crediting
The most expensive mistake subcontractors make on wrap-up bids is providing a bid credit that is too large. This happens when:
- Using a blended GL rate instead of an on-site rate: If your GL rate includes a lot of off-site and shop operations, the blended rate understates what on-site operations cost to insure. You give away a larger credit than warranted.
- Forgetting you still need your own GL for off-site work: Your premium does not go to zero because you enrolled in a wrap. You still pay for all the off-site exposure that remains on your policy.
- Crediting for coverages the wrap does not provide: If you include your workers comp cost in the bid credit and the wrap does not provide WC, you have given away money the project owner or GC did not earn.
Have your broker calculate the bid credit, not you. Your broker knows your actual policy rates and can calculate an accurate credit for on-site GL operations only. An over-credit costs you money. An under-credit may be flagged by the program administrator as inconsistent with your disclosed insurance costs.
What You Still Need on Your Own Policy When Enrolled
| Coverage | Keep Your Own Policy? | Notes |
|---|---|---|
| General Liability | Yes, for off-site operations | May receive midterm credit from your carrier for enrolled project; policy stays active for all other work |
| Commercial Auto | Yes | Wrap never covers auto liability |
| Workers Compensation | Yes | Wrap almost never includes WC |
| Contractor's Equipment | Yes | Your owned tools and equipment not covered by wrap |
| Umbrella | Yes, for non-wrap work | Enrolled project may fall under wrap limits; all other jobs still need umbrella protection |
Common Enrollment Mistakes That Cost Subcontractors Money
Dropping your own GL entirely when enrolled
The most serious and surprisingly common mistake. A sub gets enrolled in a wrap-up, calls their broker, and cancels their own GL policy to save premium. When the project ends, they restart coverage. The problem: off-site work during the project period had zero coverage. If a claim arose at the shop or on another job during that period, there is no coverage to respond.
Not notifying your own broker about enrollment
Your GL carrier needs to know you are enrolled in a wrap-up. Most commercial GL policies allow a premium credit — a wrap-up or excluded project endorsement — that reduces your premium to reflect the project's removal from your coverage. You have to tell your broker so they can request it. Missing the credit means you are paying twice: once on your policy and once through the wrap.
Assuming your subs are enrolled
Not all wrap-up programs automatically enroll lower-tier subs. Check the program documents and confirm with the program administrator before assuming your downstream subs are covered. Unenrolled subs on a wrap-up project create the same certificate compliance exposure as unenrolled subs on any other job.
Miscalculating off-site vs. on-site payroll
Wrap-up programs audit at project completion, reconciling estimated on-site payroll against actual time records. Keep records that distinguish on-site crew hours from shop and off-site hours from day one. The audit will catch payroll that was misclassified as on-site, and it will affect your credit or additional premium calculation.
Completed Operations Tail Coverage
When a wrap-up project completes, the GL coverage provided by the wrap continues for a specified tail period — covering claims arising from completed operations such as a water leak from your work that surfaces two years after project handover.
The tail period and limits are fixed by the wrap-up program. You have no control over them. Texas has a 10-year statute of repose for construction defect claims. If the wrap's completed operations tail is two years, you have an eight-year gap on your own program. Verify the tail period before signing and evaluate whether you need your own completed operations coverage to fill gaps the wrap does not cover.
What to Ask Your Broker Before Enrollment
- Will my carrier provide a premium credit for this enrolled project? Your broker needs to submit the wrap enrollment documentation to the carrier to process the credit.
- What is the accurate bid credit for my bid submission? Have your broker calculate it based on your actual GL rate for on-site operations only.
- Does the wrap program cover my second-tier subs? If not, what certificates do I still need from them?
- What is the completed operations tail period? Does it match my actual exposure window given the project type and Texas's statute of repose?
- Can you review the enrollment packet and flag anything non-standard? Wrap-up enrollment documents are not all the same. A broker experienced with wraps can identify unusual terms quickly.
For the standard insurance requirement structure that applies when you are not enrolled in a wrap-up, see our Texas subcontractor insurance requirements guide. For an overview of the OCIP vs. CCIP conceptual framework, see our OCIP vs. CCIP wrap-up overview.
Frequently Asked Questions
Can I be on a wrap-up project and also carry my own GL covering the same site?
Technically yes, but it is a waste of premium. Once enrolled, your carrier should issue a credit endorsement removing the wrap-up project from your rating base. Notify your broker about every wrap-up enrollment so the credit can be processed promptly — otherwise you are paying for the same coverage twice.
The wrap-up has $10M per occurrence limits. Do I still need my own umbrella for this project?
Typically not for the enrolled project itself — the wrap's limits apply to project-specific claims. But your umbrella policy still needs to be active for your other jobs. The enrolled project's liability falls under the wrap program; all remaining work still needs the protection of your umbrella.
What happens if the wrap-up carrier becomes insolvent?
This is a real risk on long-tail wrap programs. If the wrap carrier becomes insolvent, their obligations may be partially picked up by the Texas state guaranty fund within its statutory limits, but large claims may not be fully covered. The wrap-up carrier's financial strength rating is typically specified in the enrollment documentation. Investment-grade carriers are standard. If you see a non-rated or low-rated carrier, raise it with your broker before signing the enrollment.
I am winning additional scope on the same project via change orders. Is that automatically covered?
Usually yes — enrolled coverage on a wrap-up project typically extends to all work performed at the site under the project contract. However, notify the program administrator of significant scope additions and confirm in writing that the additional work is covered. Do not assume coverage for change orders without confirmation, particularly if they involve work types that differ materially from your original scope.