Klinedinst attorneys are often called upon to handle claims made against wrap insurance policies.
Wrap or “wrap-up” policies are designed to reduce costs and avoid headaches on major construction projects. Wrap insurance covers all parties in a construction project under one umbrella policy. The wrap policy includes the owner, general contractor, sub-contractors and all other parties involved in the construction project.
Klinedinst has significant experience working with wrap insurance policies, particularly when claims are made against the policy. The law firm was the very first to handle litigation on a wrap insurance policy for a high-rise residential project.
Wrap-up policies come in two flavors: owner-controlled and contractor-controlled. Either wrap-up policy allows the owner to spread the risk out among different parties, and provide a single insurance safety net for every company and individual involved in the project. While they have been around for decades. wrap-up policies have gained favor in recent years as the costs of litigation, financing, and raw materials have skyrocketed.
Wrap policies are useful, but they can be more expensive for the owner or primary contractor. This extra cost can be shared among the general contractors and sub-contractors, and is a small price to pay considering the peace of mind that comes with having everything “wrapped-up” under one policy.
Another risk to consider with wrap policies is that they are largely untested by the courts. Insurers writing these policies may have custom language (“manuscript”) never before interpreted. Coverage questions will become critical when there is only one insurer available to answer significant claims, especially in cases where the wrap insurer has either denied coverage or reserved its rights. In these instances, experienced counsel will be required to navigate through the maze of coverage issues.
Klinedinst construction attorneys are recognized leaders in defending claims made against wrap-up policies. There are certain pitfalls to avoid, and our experienced construction attorneys can help ensure a fast, efficient resolution for all parties involved. To learn more, please contact us today.