60
RISK MANAGEMENT
ACT
DECEMBER 2013
PROFESSIONAL LIABILITY.
Crane companies
often have limited Professional Liability
coverage via a form like the CG 2280.
Your GL policy should provide coverage
for engineering related services when
doing things like lift plans. So if a piece
of equipment is damaged or someone is
injured because of an improper critical lift
plan, the Wrap-Up likely wouldn’t have
coverage for this or any other professional
liability services.
OFF-SITE EXPOSURE.
Wrap-Up policies only
cover losses that arise on the construction
site. If you are doing fabrication work off-
site or picking up a load at a dock to bring
onto the site, claims arising at that off-site
location are not covered under a Wrap-Up
and could create exposure on your own
GL policy.
AUTO ACCIDENTS INVOLVING CRANES.
Form
CG0001 has several edition dates. Most
crane coverage is issued on the October
2001 edition date (10/01), which gives
“over the road” coverage for mobile cranes
involved in collisions. Other edition dates
of the CG0001 may not have coverage for
auto accidents on a construction site.
COMPLETED OPERATIONS CLAIMS.
Although
cranes aren’t typically involved in
construction defect claims, if such a claim
occurs, courts in some states have said the
damages occurred over multiple policy
years and thus the losses can be spread
over each of those policy years. Some of
those claims may fall outside the term of
the Wrap-Up and your own GL policy
might have exposure.
DEDUCTIBLES.
Most Wrap-Ups have a
large deductible payable per insured. A
$250,000 deductible is not uncommon.
Most crane companies have deductibles
of much smaller amounts. If there is
damage on the construction site, the
Wrap-Up often won’t pay until you satisfy
your deductible amount. So in addition
to the money you pay to participate in
the Wrap-Up, you also have to pay a
significant amount when there is a claim.
Discussions with your agent
The only way you will know about these
coverage gaps is to get a copy of the
policy from the Wrap-Up Administrator.
If they won’t give you the policy, at least
get a copy of the Schedule of Forms &
Endorsements. As an insured under the
policy, you are entitled to know what
coverage you are buying. Provide a copy
of this Policy or Schedule to your agent so
they can help you discern the differences
in coverage between your GL policy and
the Wrap-Up policy.
Then, when you are getting ready for
renewal, have a discussion with your
insurance agent about the amount of
Wrap-Up work you do. Ask about how
that work impacts your Application to
the carrier and whether your GL and
other policies have coverage when you are
enrolled in a Wrap-Up. And, if there is
coverage, does the Wrap-Up Policy pay
first or does your own policy pay first?
Make sure you discuss a Difference in
Conditions policy with your own agent to
ensure you have proper protection when
you participate in a Wrap-Up program.
■
‘‘
”
A Wrap-Up is an
insurance policy that
consolidates or ‘wraps
up’ all the insurance on a
construction project under
one insurance program.
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