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    What is Wrap-Up Liability?

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    wrap up insurance canada

    If you’re a contractor or subcontractor working on a large project, chances are you’ll want this important coverage. Read on to find out more.

    If you’re a general contractor managing an extensive construction project, or the property owner directly involved in it, getting a wrap-up liability insurance policy is your best option to protect yourself from any liabilities and give yourself peace of mind.Having a wrap-up liability policy is an effective way to make sure that everyone working on a project is covered under one secure plan. This eliminates the need for double checking each subcontractor or contractor’s individual coverage.


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    Wrap-Up Liability Definition

    Wrap-up liability is an important form of insurance that protects businesses from the financial risks associated with sudden project closures due to unforeseen circumstances. It pays for costs incurred in closing a project, such as:

    • Employee salaries and benefits

    • Equipment disposal fees

    • Subcontractor payment obligations

    Wrap-up liability provides peace of mind that the business will not be left with a financial burden resulting from a project closure, allowing it to focus on future endeavors. With the right liability insurance in place, businesses can protect themselves from unforeseen losses and remain productive.

    Wrap-Up Liability Coverage

    When purchasing any kind of business insurance, it’s important to evaluate your company’s needs and select an appropriate coverage amount. Some typical coverages included in a wrap-up insurance policy include:

    • Commercial general liability (CGL) insurance

    • Builder’s risk insurance

    • Workers’ compensation

    • Professional liability insurance


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    There are other optional coverages that you can buy as well, depending on the type of project you’re working on. For instance, it may be a good idea to invest in additional pollution liability coverage if you have reason to believe there’s asbestos in the property you’re working on.

    Difference Between Wrap-Up Liability and Builder’s Risk Insurance

    You might be wondering if you need a wrap-up liability policy if you’re already covered with builder’s risk insurance. While a builder’s risk insurance policy (also known as course of construction insurance) is essential for contractors, it can’t provide the same level of coverage that a comprehensive wrap-up policy can.Builder’s risk insurance safeguards the building structure under construction as well as any tools and machinery used on-site. Unfortunately, it does not offer Commercial General Liability (CGL) protection.However, you can always add this coverage to your builder’s risk policy if needed. On larger projects that are more complicated in nature, a stand-alone builder’s risk policy may not be enough to cover all risks involved. This is why it’s important to make sure you have wrap-up liability to stay covered in the event that something goes wrong.


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    What Advantages Does a Wrap-Up Liability Insurance Policy Offer?

    Investing in a wrap-up liability policy offers multiple advantages, such as:A single wrap-up liability policy eliminates the need for inadequate or incomplete coverages across various insurance plansBundling multiple coverages can save you moneyTo ensure greater protection, all contractors on the policy are usually eligible for higher coverage limitsGeneral contractors don’t have to monitor their subcontractors’ certificates of insurance

    Is Wrap-up Liability Right for Me?

    All businesses should carefully consider the risks associated with sudden project closures. Having the right wrap-up liability insurance in place is essential for protecting a business from suffering unforeseen financial losses. By taking the time to look for the proper coverage, project owners and general contractors can have peace of mind knowing their investments are protected and they can continue to focus on what’s next.

    APOLLO Insurance offers effortless solutions that will have you insured in no time flat. Get a free quote in less than five minutes and have your new policy sent directly to your inbox.


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    Originally published December 28, 2022, updated August 25, 2023

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