Cost Savings is one of the main benefits of implementing a Wrap Up. In order to make more money, companies must be creative and find ways to cut project costs. Typically, you don’t want to cut cost in key areas like hiring quality contractors to perform the work or using quality materials to build the project. So, what better way to save than cutting the cost of insurance?
Smaller companies may not be able to afford the insurance necessary for large construction projects. It costs small companies more to carry that insurance than it costs large, nationwide construction companies. Using Wrap Up insurance for small companies along with the large contractors provides companies with more insurance coverage and decreases the cost of higher insurance limits.
You may be wondering how you achieve these cost savings. There are several points that we believe are vital to maximize savings on your project.
There are many tiers of contractors and subcontractors on construction projects. The most vital piece of ensuring cost savings is communication with the contractors. It is vital that you inform your direct subcontractors that the cost of insurance is going to be removed from their contract (or in some cases has already been removed). It is important that contractors understand this so they can have their subcontractors remove the cost of their subcontractor insurance from their contract. It’s also important that each contractor be aware of the Wrap Up so they can inform their insurance carrier. The payroll hours and dollar amount reported under the Wrap Up Workers’ Compensation policies are not eligible to be reported to any other Workers’ Compensation policy, as that would mean that those hours would have double coverage. Communication with their insurance carrier is extremely important.
The second way to save on any construction project is safety. Safety is a priority for anyone working on or visiting the jobsite.
The more safety is enforced, the less likely it is for claims to occur. Fewer claims mean less money is spent on caring for the persons injured on the job site, and less money spent paying the worker for their lost time.
The third way to ensure cost saving is to properly track insurance credits provided by each contractor that enrolls into the Wrap Up. To do this, each contractor should be required to fill out an insurance cost worksheet. This worksheet calculates the expected cost of their insurance had the Wrap Up not been in place. To properly calculate this cost, the contractor should work with their carrier to obtain copies of their policies or at least the rate pages from their policies. Typically, the following policy rating pages are required for Full Wrap Projects: General Liability, Workers’ Compensation, and Excess Liability. When the proper documents are provided, the Wrap Up Administrator can help ensure that the proper credit is calculated so that the contractor is being charged in accordance with their overall contract value.
The final way to ensure money is saved is reporting payroll. It is important to track weekly or monthly payroll because Workers’ Compensation policies are calculated on reported payroll. It is also key that the payrolls are reported in a timely manner, as this helps all parties to know whether the project is on track with saving money and shows where adjustments need to be made.
Through communication, safety, proper insurance credits and reporting payroll, Wrap Up Sponsors will be able to accurately track and ensure their cost savings. An automated system such as VUE Wrap-Up helps automate tracking and reporting of each of these steps to ensure these cost saving steps are not overlooked.
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