Understanding the cost of a wrap-up goes far beyond simple premium calculations. Yes, workers comp, general liability, and excess premiums do account for nearly 3/4ths of all wrap-up costs; however, other costs such as claims, broker/admin fees, and taxes/assessments constitute a large amount of money also. We wanted to look at a few different projects, so we could see where the sponsors’ money was going. We analyzed the costs for 6 wrap-up programs, and standardized the costs based on a percentage of the enrolled construction value.
A project’s location will greatly affect wrap-up costs. Premiums, along with claim payments are more expensive in New York, as seen with projects 
, 
, 
, 
. Also, the type of policy shifts costs from one category to the next. Project 
was a guaranteed cost program for workers comp; thus, the claim expenses are smaller than on other NY jobs. However, the WC premium is much more expensive. Project 
had one million dollar deductibles; thus, the claim expenses were very high, but the premiums were cheaper. The importance of understanding wrap-up costs is immense. If the sponsor’s objective is to maximize possible savings through large deductibles or by going a more conservative route through a guaranteed cost program, a well designed program should fit the sponsor’s objectives. The broker should work closely with the sponsor and understand his or her objectives before marketing the program.
