Construction Wrap-Ups

The editorial, "the insurance crisis May Have a Cleansing Effect" (ENR 2/4 p. 48) paints construction wrap-ups with a dirty brush in an insurance marketplace where these programs should be accepted as a fresh new coat of protection. Your statement that "there is no incentive for subs to work safe" is incorrect.

All contractors enrolled into a wrap-up provide their federal Employer Identification Numbers as part of the policy application process. A contractor's loss experience on a wrap-up is recorded under that number and is factored into the experience modifier and ultimately effects the premiums they pay in the future.

In addition, the statement that "no carrier is going to provide affordable coverage for potential exposure from a completed job" is also incorrect. Typically wrap-ups are implemented with "Completed Operations Coverage" for at least 36 months after final project completion.

This misunderstanding regarding wrap-ups is evident in the construction industry. Consolidated Insurance Programs, or wrap-ups, are an excellent means for owners and contractors to save a significant amount on insurance costs, especially in the current "hard" insurance market.

CIPS are also an invaluable risk management tool that focus on safety and claims administration. Safety and loss control become part of the project culture as the owner, insurance company and insurance broker all have representatives on site to enforce safety guidelines and communicate best practices.

Safety means more than words in a project safety manual, and wrap-ups help get that message across.

Account Manager
Hobbs Group LLC
Boston, Mass.

Program Management's Flip Side

Your article on program management (ENR 1/21 p. 30) explored the pros and cons of exactly one third of the issue. It included many comments from the owners and PM firms, but no comments from the architectural or construction community.

In my area approximately one-half billion dollars of school construction has been performed using various program management firms. If you were to poll the contractors and architects who were forced to work under this format, I believe you would find a universal response that the projects took longer to produce, were more costly to build and manage than the traditional owner/architect/contractor method, and adversarial relationships were the norm.

In an effort to prove their value, program management firms are tempted to emphasize mistakes made by the architect or contractor, instead of working through problems that would move a project forward.

If program management doesn't speed up work, save money or create better working relationships, then where is its place in our industry?



An article on contracts awarded for transit repair work beneath the World Trade Center (ENR 2/18 p. 13) incorrectly identified a contractor on the winning teams. The firm's correct name is A.J. Pegno Construction Corp. The firm is based in College Point, N.Y.