Course of Construction and Wrap Up Liability Insurance
From CCI Vancouver Condo News, Spring Issue 2019
While smaller projects may be covered under an existing strata policy, typically any projects in excess of $1 million require a Course of Construction (COC, also called Builder’s Risk) and Wrap Up Liability.
The COC policy insures buildings or projects against repair or reconstruction costs while they are in the course of construction, reconstruction, repair or installation. The COC also covers the building materials, fixtures and appliances; all of which are intended to become an integral part of the structure under construction.
The Wrap Up Liability provides third party liability coverage for all trades, subtrades, engineers, architects, etc who come onto the property. This eliminates the need to request a certificate of insurance from every trade that enters the property to ensure they have adequate liability coverage in force. It also saves the strata from following up to ensure they have renewed it.
The other benefit to the Wrap Up is Completed Operations coverage. As an example, if a plumber does work as part of a project and 6 months later an elbow joint breaks and it’s deemed that the plumber installed the joint incorrectly. The plumber has since gone out of business which means the strata cannot subrogate against the plumber to recoup the cost of the loss. Under the Wrap Up Liability, there’s a built-in completed operations window which will respond in the event of an incorrect installation.
Should an insured loss occur as a result of the construction, the loss would go under the COC or Wrap Up Liability policy (depending on the type of loss) and not fall under the strata’s policy which is beneficial for the strata as it won’t negatively affect the strata’s loss history.
Grace Wang is an Account Executive with HUB International Insurance Brokers’ Strata Division, located in Burnaby, BC. Grace joined HUB International in 2014, and has been in the insurance industry since 2012.
As an Account Executive, Grace is responsible for developing and placing insurance coverage for both new and existing strata clients.
HUB International Coastal Insurance Brokers
400 - 4350 Still Creek Drive
Burnaby, BC V5C 0G5
From The Strata Experts articles are written by CCI Vancouver Business Partner and Professional Members who are service providers to the strata industry. For a list of member service providers go to the Service and Business Members directory on our website or page 20 in Condo News.
DISCLAIMER, USE INFORMATION AT YOUR OWN RISK
This is solely a curation of materials. Not all of this information is created, provided or vetted by CCI. Some of the information is only applicable to certain provinces. CCI does not make any warranties about the reliability or accuracy of any information found in the materials on this website. The information is not updated to reflect changes in legislation or case law and therefore may not always be current and up-to-date. We suggest you seek professional advice with respect to your specific issues or regarding any questions that arise out of the material. We will not be liable for any losses or damages in connection with the use of any of the material found on the website.