1. The Unique Risk of Construction Wrap-up Policies

2. Agenda Presenters History of Wrap-up Policies CIP Terms & Types Differences: General vs. Wrap-up Policies Advantages & Disadvantages Discussion Points Ethical Considerations 2

3. Presenters Brian Trusky – Vice President, Loss Prevention - Moss & Associates Thomas Martyn, Esq. – Law offices of Martyn, Toher, Martyn (LM) Thomas McBride, Esq. – Partner, Delaney & O’Brien 3

4. Market History of Wrap-up Policies Origination of Policy Type – Why existing insurance products didn’t fit need – Period of use Areas of Historic Use – Commercial Developers – Government Projects – Large Public Projects Ex: 4

5. CIP Terms & Types Controlled Insurance Program (CIP) – Centralized and controlled insurance and risk program – Sponsored by contractor or project owner – Covers owner, and participating contractors and subs – Maintains overall responsibility for worksite& safety – Claim management & involvement CIP Sponsor – The party who purchases the Wrap Up policy CCIP – Contractor is the sponsor OCIP – Owner is the sponsor 5

6. CIP Terms & Types Maintenance CIP – Ongoing contract work for ongoing facilities – CIP remains in place – Contracted work added as it occurs Rolling CIP – Ongoing CIP – Insure multiple construction projects Other Types – Residential, Environmental, GL only, International… 6

7. CGL Intended for insured’s entire operation Named insured is our client Policy forms are largely the same 1 year policy CIP Site specific coverage Enrolled subs also become our insured’s Endorsement unique/ provides Tail coverage Multi year policy

8. Why CIP Over Traditional CGL? CIP Sponsor buys insurance for contractors One broker and one carrier Uniform coverage and limits One rate Uniform safety approach Select litigation and claim dashboards can be mitigated Better Monitoring of Settlement/Closeout CGL Insured buys insurance from contractors Different brokers and carriers Various coverage and limits among all parties Various rates Various safety approaches Litigation and claim vulnerabilities 8

9. Project Close-Out Close-Out vs. Termination Factor: High Unemployment rate (need additional bullets) 9

10. Removes litigation efforts for: - Proving/disproving contractual defense - Indemnification claims Only one defense office handling the defense of plaintiff’s claim

11. Provides for unified and more efficient approach to the defense and litigation strategy Securing the cooperation of multiple sub- contractors - May no longer have working ties with the owner and/or general contractor

12. No co-defendant disagreement regarding - Settlement - Arbitrations - Mediations Issues that can arise when contractors do not unite/agree - GL not named in suit, but is paying legal costs - Sub-contractor disagreement re: Strategy - Claims needs to separate handling

13. Cuts down significantly on time spent on litigation - Co-defendants discovery demands - Interrogatories - Depositions - Contractual indemnification claims Only one office to coordinate multiple responses to interrogatories, depositions, discovery responses

14. Trials - Avoids Jury Sympathy Single plaintiff’s attorney up against multiple defense attorneys - Avoids Jury Confusion Multiple defendants, multiple positions, opinions and conclusions Trials - Jury awareness that insurance is involved - Jury confusion about attorneys role in representing multiple parties

15. Advantages 1.Removes litigation efforts in proving/disproving contractual defense and indemnification claims 2.Provides for unified and more efficient approach to the defense and litigation strategy 3.Simplified settlement: No co-defendant disagreement regarding – Amount of settlement – Arbitrations – Mediations 4.Cuts down significantly on time spent on litigation – Responding to co-defendants discovery demands – Interrogatories – Depositions – Contractual indemnification claims 5.Trials – Avoids Jury Sympathy - Single plaintiff’s attorney up against multiple defense attorneys – Avoids Jury Confusion - Multiple defendants, multiple positions, opinions and conclusions. 15

16. Disadvantages 1.Only one defense office handling the defense of plaintiff’s claim 2.One office to coordinate multiple responses to interrogatories, depositions, discovery responses 3.Trials – Jury confusion about attorneys role in representing multiple parties. – Jury awareness that insurance is involved. 16

17. Disadvantages 1.Securing the cooperation of multiple sub- contractors some of which may no longer have working ties with the owner and/or general contractor 2.Issues that can arise when contractors do not unite/agree – GL not named in suit, but is paying legal costs – Sub-contractor disagreement re: Strategy – Claims needs to separate handling 17

18. Ethical Conflicts/Considerations How to identify the client – Areas of potential GC/Sub conflict of interest Understand claims handling and reporting needs of case Do you need separate handling of case? – Different Claims handler – Different attorneys Addressing cross-claim issues Why a unified defense might not be possible Terminating CIP Program 18

19. Questions? 19