Australia’s construction and infrastructure sectors are booming, but with growth comes risk. One of the hottest risk management tools in 2025? Wrap-up insurance. This all-in-one insurance policy is shaking up how large projects manage liability, workers’ comp, and more. Whether you’re a project owner, builder, or subcontractor, understanding wrap-up insurance is crucial for reducing costs and protecting your interests.
What Is Wrap-Up Insurance?
Wrap-up insurance, sometimes called a consolidated insurance program (CIP), bundles together insurance coverage for all parties involved in a large construction project—owners, contractors, and subcontractors—under a single policy. Instead of every contractor sourcing their own cover, the project owner or primary contractor purchases one overarching policy. In 2025, these programs are gaining traction in Australia as project sizes, complexities, and regulatory scrutiny increase.
- Owner-controlled insurance programs (OCIP): The project owner purchases and manages the policy.
- Contractor-controlled insurance programs (CCIP): The head contractor procures and manages the policy.
This approach can cover public liability, workers’ compensation, and even environmental and professional indemnity risks, depending on the project’s needs and the policy’s scope.
Why Are More Australian Projects Using Wrap-Up Insurance in 2025?
Several trends and policy shifts are driving wrap-up insurance’s rising popularity:
- Regulatory Compliance: Major states, including NSW and Victoria, have updated their construction insurance requirements, encouraging consolidated risk management and tighter oversight on large-scale developments.
- Cost Efficiency: By pooling insurance, project owners can negotiate better rates, avoid duplicated coverage, and reduce administration—key in a high-inflation environment.
- Streamlined Claims: A single policy means fewer disputes over ‘who’s responsible’ if something goes wrong, making claims handling more efficient and less adversarial.
- Workforce Mobility: Workers and contractors move between sites more often in 2025, and wrap-up programs ensure consistent cover across the board.
Example: In Sydney’s Western Metro expansion, the state government adopted an OCIP to manage insurance for all contractors and subcontractors, citing improved project oversight and substantial premium savings compared to traditional fragmented policies.
What Does Wrap-Up Insurance Cover (and What Doesn’t It)?
Wrap-up policies can be highly customised, but typically include:
- Public and Product Liability—Covers injury to third parties and property damage.
- Workers’ Compensation—Mandatory for on-site injuries, with state-specific variations.
- Contract Works Insurance—Protects against damage to the project itself from things like fire, flood, or vandalism.
- Optional Add-ons—Professional indemnity, environmental liability, and cyber cover are increasingly included in 2025 wrap-up deals.
What’s Not Covered? There are limits: off-site manufacturing, completed operations after handover, or intentional wrongdoing may be excluded. Subcontractors might still need to maintain their own insurance for unrelated projects or non-site activities.
Key Considerations When Choosing Wrap-Up Insurance in 2025
- Project Value Thresholds: Most insurers only offer wrap-up programs for projects over $20 million—though some specialist brokers now cater to mid-sized builds as the market matures.
- State-by-State Rules: Workers’ compensation is still regulated at the state level. For example, Queensland’s strict WorkCover rules mean wrap-up schemes must be carefully structured to comply.
- Claims Management: A single claims process sounds simple, but it requires robust administration. Owners and head contractors should appoint an experienced broker or administrator to manage disputes and coordinate between all parties.
- Policy Duration and Extensions: Construction delays are common. Ensure your wrap-up policy allows for extensions if the project overruns, or risk being exposed at the most vulnerable time.
- Transparency: Subcontractors should be clear on what’s covered and what isn’t—hidden gaps can leave smaller players exposed if not properly briefed.
As of 2025, competition among insurers has increased, so it’s wise to shop around and compare policy features, not just price.
Conclusion: Should You Consider Wrap-Up Insurance?
Wrap-up insurance is no longer just for mega-projects. With evolving regulations and a focus on cost efficiency, it’s fast becoming the new normal for Australian construction. If you’re planning or managing a large-scale build, now’s the time to look into a consolidated insurance program that protects everyone on site and keeps your project on track.
