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'Wrap-up' insurance becomes the preferred, affordable option; unconventional coverage offsets rising costs driven by condo-defect litigation.

Article Excerpt
Wrap-up insurance programs that protect owner, developer, general contractor and subcontractors involved in large construction projects have become standard as the cost of traditional coverage has skyrocketed.

Previously, participants purchased coverage independently to protect against financial losses due to workers' compensation, general liability, excess liability and builders' risk claims.

But during the past decade, so called wrap-up insurance, or "wrap ups," has been used increasingly, mainly due to the inability to purchase traditional coverage, even at much higher costs.

Scott Bedingfield, executive vice president of San Diego-based Cavignac & Associates commercial insurance brokers, said between 1978 and 1991 approximately 75 percent of all condominiums developed were involved in construction defect litigation.

"For every dollar that the insurance carriers were bringing in premiums, they...

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