Rates and forms

Mini-Wrap exemption from ORS 737.602 and 737.604 commercial general liability ONLY

Introduction:

A commercial general liability (CGL) "mini-wrap" is not technically a "wrap-up policy" as discussed in ORS737.602 of the Insurance Code. Instead it would be a CGL policy issued to the general contractor, and would contain an additional insured endorsement for each sub-contractor the general is providing coverage to under the general's policy. In order to provide compliance with the Oregon Construction Contractors Board (CCB) licensing and insurance requirements [statutes are outlined later in this document], the sub would need to be able to provide proof of insurance. The sub contractor can exclude the revenue generated from a project covered by a mini wrap policy from their own CGL policy. The mini wrap policy is not proof of coverage for the CCB. The sub contractor needs to keep their own CGL policy in force for other projects and to meet CCB requirements.

Following are sections from Oregon Code that provide the exemptions from having to file a commercial general liability wrap-up. If the general liability insurance coverage is provided by a surplus lines insurer pursuant to ORS 735.400 to 735.495, it is exempt entirely.

In those situations where the general contractor (Contractor Controlled Insurance Project or CCIP) or project owner (Owner Controlled Insurance Project or OCIP) wishes to provide a general liability insurance policy for a specified project valued at $90 million or more, a wrap-up filing would be required. ORS 737.602 and ORS 737.604 include directions on how to qualify for a wrap-up

Under ORS 656.005(4), Oregon requires Workers Compensation insurance to be written in the admitted market. There are also self-insured options outlined under ORS 656.017. Workers Compensation insurance cannot be written as surplus lines. It must meet the specific statutory requirements found in ORS Chapters 656 and 737. Workers Compensation written as either a CCIP or an OCIP would require a wrap-up filing. See ORS 737.602 and ORS 737.604 on this subject.

Statutes:

737.035 Application of chapter. This chapter applies to all forms of insurance on risks or operations in this state, except:

(1) Reinsurance, other than joint reinsurance to the extent stated in ORS 737.390;

(2) Insurance against loss of, or damage to, aircraft, including accessories and equipment, or against liability arising out of ownership, maintenance or use of aircraft;

(3) Wet marine and transportation insurance;

(4) Life insurance;

(5) Health insurance; or

(6) Surplus lines insurance. [1969 c.690 §2; 2005 c.185 §10]

Fictitious Groupings

737.600 Fictitious grouping for rate purposes prohibited; rules; exceptions. (1) As used in this section, "fictitious grouping" means a grouping by way of membership, license, franchise, contract, agreement or any method other than common ownership, or use and control.

(2) An insurer may not:

(a) Make available, through any rating plan or form, property, inland marine, casualty or surety insurance, or any combination thereof, at a preferred rate or premium to any person based upon a fictitious grouping of that person.

(b) Write or deliver a form, plan or policy of insurance covering a grouping or combination of persons or risks, any of which are within this state, at a preferred rate or form other than that offered to the public generally and persons not in the group, unless the form, plan or policy and the rates or premiums to be charged therefor have been approved by the Director of the Department of Consumer and Business Services. The director shall not approve any form, plan or policy, or the rates therefor, that would constitute a violation of paragraph (a) of this subsection.

(3) This section does not apply to:

(a) Policies of life or health insurance;

(b) Insurance for public bodies as defined in ORS 30.260;

(c) Insurance for employers subject to ORS chapter 656 who are primarily engaged in farming. Any contract negotiated by an exempt farming group, including the rate, shall be restricted to members of the group;

(d) Property and casualty insurance policies for personal, family or household purposes, and not for commercial or business purposes, under the following conditions:

(A) If the policies are offered to members of an association, including a labor union, which has had an active existence for at least one year, has a constitution and bylaws and is maintained in good faith for purposes other than that of obtaining insurance;

(B) If the policies are based on premiums that are adequate to support coverage of the group without subsidy by other rate payers; and

(C) If the insurer does not unfairly discriminate against holders of other insurance policies;

(e) Liability and property insurance required under ORS 825.160 for persons who apply for or who have received authority issued by the Department of Transportation under ORS chapter 825 to transport logs, poles, pilings, peeler cores, lumber, shingles, veneer, plywood, particle board, wallboard, siding, cordwood in long or short lengths, sawdust, hog fuel, wood chips, wood pellets, bark dust or cut trees that are or will be sold for use as Christmas trees;

(f) Liability or casualty insurance issued in this state on commercial risks, if:

(A) The policy requires active participation in a plan of risk management which has established measures and procedures to minimize both the frequency and severity of losses;

(B) The policy passes on the benefits of reduced losses to plan participants; and

(C) Rates are actuarially measurable and credible and sufficiently related to actual and expected loss and expense experience of the group so as to assure that nonmembers of the group are not unfairly discriminated against;

(g) Insurance for child care facilities that are certified in accordance with ORS chapter 329A; or

(h) Liability insurance for contractors licensed under ORS chapter 701.

(4) Under ORS 731.244, the director shall make rules necessary for implementation of this section. [Formerly 737.346; 2007 c.210 §1]

701.021¹

License requirement
endorsements

(1) Except as provided in ORS 701.010 (Exemptions from licensure), a person or joint venture that undertakes, offers to undertake, or submits a bid to do work as a contractor must have a current license issued by the Construction Contractors Board and possess an appropriate endorsement as provided in this section. For purposes of offering to undertake or submitting a bid to do work, a partnership or joint venture is licensed and endorsed if any partner or joint venturer whose name appears in the business name of the partnership or joint venture has a current license issued by the board and possesses an appropriate endorsement.

(3) A person or joint venture that undertakes, offers to undertake, or submits a bid to do work as a contractor in preparation for or in connection with a small commercial structure must have one of the following endorsements:

(a) Residential general contractor
(b) Residential specialty contractor
(c) Residential limited contractor
(d) Residential developer
(e) Residential locksmith services contractor
(f) Commercial general contractor level 1
(g) Commercial specialty contractor level 1
(h) Commercial general contractor level 2
(i) Commercial specialty contractor level 2
(j) Commercial developer.

(4) A person or joint venture that undertakes, offers to undertake, or submits a bid to do work as a contractor in preparation for or in connection with a large commercial structure must have one of the following endorsements:

(a) Commercial general contractor level 1
(b) Commercial specialty contractor level 1
(c) Commercial general contractor level 2
(d) Commercial specialty contractor level 2
(e) Commercial developer. [2007 c.836 §2; 2010 c.57 §1; 2013 c.300 §8; 2013 c.383 §10]

Note: The amendments to 701.021 (License requirement) by section 10, chapter 383, Oregon Laws 2013, become operative July 1, 2014. See section 17, chapter 383, Oregon Laws 2013. The text that is operative until July 1, 2014, including amendments by section 8, chapter 300, Oregon Laws 2013, is set forth for the users convenience.

701.021 (License requirement):

(1) Except as provided in ORS 701.010 (Exemptions from licensure), a person or joint venture that undertakes, offers to undertake, or submits a bid to do work as a contractor must have a current license issued by the Construction Contractors Board and possess an appropriate endorsement as provided in this section. For purposes of offering to undertake or submitting a bid to do work, a partnership or joint venture is licensed and endorsed if any partner or joint venturer whose name appears in the business name of the partnership or joint venture has a current license issued by the board and possesses an appropriate endorsement.

(3) A person or joint venture that undertakes, offers to undertake, or submits a bid to do work as a contractor in preparation for or in connection with a small commercial structure must have one of the following endorsements:

(a) Residential general contractor
(b) Residential specialty contractor
(c) Residential limited contractor
(d) Residential developer
(e) Residential locksmith services contractor
(f) Commercial general contractor level 1
(g) Commercial specialty contractor level 1
(h) Commercial general contractor level 2
(i) Commercial specialty contractor level 2
(j) Commercial developer.

(4) A person or joint venture that undertakes, offers to undertake, or submits a bid to do work as a contractor in preparation for or in connection with a large commercial structure must have one of the following endorsements:

(a) Commercial general contractor level 1
(b) Commercial specialty contractor level 1
(c) Commercial general contractor level 2
(d) Commercial specialty contractor level 2
(e) Commercial developer.

701.073¹
Insurance required of licensed contractors

(1) A contractor who possesses a license as required under this chapter shall have in effect public liability, personal injury and property damage insurance covering the work of the contractor that is subject to this chapter, including the covering of liability for products and completed operations according to the terms of the policy and subject to applicable policy exclusions, for an amount not less than the applicable amount set forth in ORS 701.081 (Residential contractors) or 701.084 (Commercial contractors).

(2) The contractor shall provide satisfactory evidence to the Construction Contractors Board at the time of licensure and renewal that the insurance required by subsection (1) of this section has been procured and is in effect. [Formerly 701.105]

701.084¹

Commercial contractors

  • Bond
  • Insurance
  • Responsible managing individual
  • Key employees

(1) A commercial general contractor level 1 shall:

(a) Obtain a surety bond under ORS 701.068 (Bonding requirements) in the amount of $75,000;

(b) Obtain general liability insurance under ORS 701.073 (Insurance required of licensed contractors) in an amount of not less than $2 million;

(c) Have a responsible managing individual who meets the requirements of ORS 701.091 (Responsible managing individual); and

(d) Have one or more key employees with a combined total of at least eight years of experience described in ORS 701.050 (Commercial contractor key employees).

(2) A commercial specialty contractor level 1 shall:

(a) Obtain a surety bond under ORS 701.068 (Bonding requirements) in the amount of $50,000;

(b) Obtain general liability insurance under ORS 701.073 (Insurance required of licensed contractors) in an amount not less than $1 million;

(c) Have a responsible managing individual who meets the requirements of ORS 701.091 (Responsible managing individual); and

(d) Have one or more key employees with a combined total of at least eight years of experience described in ORS 701.050 (Commercial contractor key employees).

(3) A commercial general contractor level 2 shall:

(a) Obtain a surety bond under ORS 701.068 (Bonding requirements) in the amount of $20,000;

(b) Obtain general liability insurance under ORS 701.073 (Insurance required of licensed contractors) in an amount of not less than $1 million;

(c) Have a responsible managing individual who meets the requirements of ORS 701.091 (Responsible managing individual); and

(d) Have one or more key employees with a combined total of at least four years of experience described in ORS 701.050 (Commercial contractor key employees).

(4) A commercial specialty contractor level 2 shall:

(a) Obtain a surety bond under ORS 701.068 (Bonding requirements) in the amount of $20,000;

(b) Obtain general liability insurance under ORS 701.073 (Insurance required of licensed contractors) in an amount not less than $500,000;

(c) Have a responsible managing individual who meets the requirements of ORS 701.091 (Responsible managing individual); and

(d) Have one or more key employees with a combined total of at least four years of experience described in ORS 701.050 (Commercial contractor key employees).

(5) A commercial developer shall:

(a) Obtain a surety bond under ORS 701.068 (Bonding requirements) in the amount of $20,000; and

(b) Obtain general liability insurance under ORS 701.073 (Insurance required of licensed contractors) in an amount not less than $500,000. [2007 c.836 §4; 2008 c.5 §1]

Wrap-up (CCIP or OCIP) Statutes

List of Active Wrap-Up Projects (updated periodically)

For wrap-up questions or filing assistance:

Jan Vitus, Analyst
(503) 947 7278
Jan.vitus@oregon.gov
​​​
​​