# Residential Wrap-Ups for Condominium, Townhome and Tract Projects URL: https://mycontractorsinsurancequote.com/wrap-up-insurance/residential-wrap-ups Updated: 2026-10-29 · Reviewed by the Principal, Gleason Insurance Brokers, LLC Publisher: My Contractors Insurance Quote, a website of Gleason Insurance Brokers, LLC A residential wrap-up puts the builder, the general contractor and the enrolled trades on one liability program for a for-sale project, so a homeowner or association defect claim years later can be answered by one set of limits instead of a dozen trade policies that may have lapsed or excluded the work. The program is only as useful as its completed operations term, its aggregate and how many units share that aggregate. California also changes the subcontract itself on a wrapped residential job, so the policy and the trade contracts have to be designed together. ## Key Decision Points - On a for-sale wrap, the decision that matters most is how long completed operations protection lasts and whether the aggregate is shared with other units or phases. - California Civil Code §2782.95 requires residential wrap sponsors to disclose limits, scope, term, the deductible trigger and, for multi-project policies, the units on the application. - Under Civil Code §2782.9, enrolled participants on a California residential wrap cannot be made to indemnify or defend for claims the program covers, but a disclosed, proportionate retention contribution is allowed. - Texas Insurance Code chapter 151 does not reach single-family houses, townhouses or duplexes, so many Texas tract wraps fall outside its disclosure rules. - Trades that leave the wrap, or work before enrolling, bring back the residential exclusions the wrap was meant to avoid. ## Why For-Sale Residential Wraps Are Built Differently A commercial wrap is usually judged by its ongoing operations: site injuries, crane incidents and damage to neighbors during the build. A for-sale residential wrap is judged mostly after the last escrow closes. The buyers of individual homes, and on a condominium the owners association, can bring defect claims for roofs, windows, decks, slabs and plumbing long after the builder has left the site, and those claims tend to name every trade that touched the failing system. That pattern changes the purpose of the program. The builder is not mainly buying efficiency at bid time. It is buying a single answer to the claims that will arrive in years five through 10, from a carrier that agreed up front to insure residential work. Many trade liability forms restrict condominium, townhome or tract work by endorsement, so relying on each trade's annual policy can leave the builder holding claims against subcontractors whose insurance never applied. The trade-off is concentration. Every enrolled party draws from the same limits, and those limits must last for the whole defect period. The structure questions below are about protecting that shared pool. For the general mechanics of sponsors, enrollment and program types, see [how wrap-up programs are structured](https://mycontractorsinsurancequote.com/wrap-up-insurance). ## Completed Operations Term, Aggregate and Unit Count Three numbers define a residential wrap: the per-occurrence limit, the products-completed operations aggregate and the length of the completed operations extension. The aggregate is the one most often misunderstood. If one aggregate sits behind every unit in every phase for a decade, a single water intrusion claim on a podium condominium can consume protection that later buyers in the same project were counting on. Ask whether the aggregate applies per project, per phase or across the whole policy, whether it reinstates at any point and whether excess layers carry the same completed operations term as the primary. An excess layer that ends earlier than the primary can leave the late years of the tail thinly insured exactly when association claims tend to surface. The extension also has to be matched to the law. In California, Civil Code §941 generally bars actions under the residential defect title more than 10 years after substantial completion, and it counts indemnity actions against trades within that limit. A program whose tail ends well short of that horizon leaves the builder relying on whatever annual coverage exists years later. For how completed operations coverage and the repose statutes interact, see [completed operations terms and repose periods](https://mycontractorsinsurancequote.com/project-specific-liability-insurance/completed-operations). ### Illustrative scenario: Two-Phase Condominium in San Diego County A builder plans 140 for-sale condominium units in two buildings, with phase two starting 18 months after phase one. The broker's market review finds that the proposed wrap carrier would write one aggregate across both buildings with a completed operations extension shorter than the Civil Code §941 horizon. The builder's counsel prepares the §2782.95 disclosures for the subcontract packages, including the unit count on the application and the insurer's estimate of remaining limits, and adds a retention contribution clause that names a maximum per trade. Before bids go out, the builder asks the market for separate aggregates by building and an excess layer with the same tail, and compares that structure with a project policy for the builder alone. ## California's Residential Wrap Disclosures California writes a separate disclosure rule for private residential work. Civil Code §2782.95 applies to a wrap-up or other consolidated program on a private residential work of improvement that first commenced construction after January 1, 2009. The owner, builder or GC that obtains the program must disclose in the contract documents the total amount or method of calculating any premium credit or compensation it requires from a participant. The contract documents must also disclose, if and to the extent known, the policy limits, the scope of coverage, the policy term and the basis on which the carrier triggers the deductible or occurrence. Two disclosures are specific to residential programs: if the policy covers more than one work of improvement, the number of units shown on the insurance application, and a good faith estimate from the insurer of the limits remaining under the policy as of a stated date. Those last two items exist because a residential wrap can be shared across communities and depleted by earlier claims. The statute also says that if the credit is not disclosed before the participant bids, the participant is not bound by its bid unless it may raise the bid by the difference between what it included for insurance and the credit required. For the other California statutes that shape a builder's program, see [California rules for residential developers](https://mycontractorsinsurancequote.com/california/audiences/developers). ## Indemnity, Equitable Indemnity and the Retention Contribution On a California residential project with a wrap or other consolidated program, Civil Code §2782.9 makes contract terms unenforceable to the extent they require an enrolled participant to indemnify, hold harmless or defend another for a claim the program covers arising from that project. Where a contract term falls under that rule, the statute still allows an equitable indemnity claim between the parties unless the wrap covers the claim. That has a practical consequence for the subcontract. The builder's protection for covered claims comes from the wrap, not from the trade's indemnity, so the program's limits and term carry more weight than they would on a traditional job. For claims the wrap does not cover, such as excluded operations or work done off site, the builder still needs a subcontract that works under Civil Code §2782(d) and its tender process. The same section lets a builder or GC require a reasonably allocated contribution toward the wrap's deductible or self-insured retention. The maximum amount and collection method must be in the participant's contract, collection happens only when the retention is incurred and after written notice of the amount and basis, the share must be proportionate to the claim attributed to that participant's scope and total contributions cannot exceed the retention due. The rule cannot be waived by contract. For how a GC prices and allocates a program it sponsors, see [contractor-controlled programs and retention chargebacks](https://mycontractorsinsurancequote.com/wrap-up-insurance/ccip). ## Texas and Arizona Residential Programs Texas Insurance Code chapter 151 regulates consolidated insurance programs, but its definition of construction project excludes a single-family house, townhouse, duplex or land development directly related to them. A Texas tract or townhome wrap may therefore fall outside the chapter's 10-day disclosure package and its three-year completed operations minimum. A condominium building is not on that excluded list, so a Texas condominium wrap should be checked against chapter 151 before the sponsor issues its enrollment documents. Texas residential defect claims run through Property Code chapter 27, which requires written notice to the contractor before the 60th day preceding suit and gives the contractor inspection rights and a window to make a written settlement offer. Section 27.004(p) preserves a contractor's contribution rights against a subcontractor it notified of the claim, which matters less on a wrap where both share one insurer but still matters for non-enrolled trades. This page does not point to an Arizona wrap disclosure statute comparable to California's or Texas', so on an Arizona program the written terms and the subcontracts carry most of the load; ask counsel whether any local or statutory rule applies. Arizona's purchaser dwelling action statutes still shape claims handling: under A.R.S. §12-1362(C), an insurer that receives a seller's or construction professional's notice under §12-1363 must treat it as a notice of claim under the policy terms. For the defect statutes and why residential liability is hard to place, see [residential and tract liability exposures](https://mycontractorsinsurancequote.com/project-specific-liability-insurance/residential-tract-exposures). ## Enrollment Gaps That Reopen Residential Exclusions The wrap only helps for the parties and operations it insures. Suppliers, haulers, off-site fabricators and design professionals are commonly excluded, and some programs leave out specific trades such as abatement. On a for-sale project, the more consequential gap is the trade that performs its work before its enrollment is accepted, or a lower-tier subcontractor nobody enrolled. Those parties fall back on their own annual policies, which may carry the residential or tract exclusions the wrap was designed to avoid. Many trade policies also exclude projects insured under a wrap, so a non-enrolled framer could end up with neither policy responding. The builder learns about the gap when the association's expert report lists that framer's work. Production builders reduce the gap by matching enrollment dates to first days on site, tracking lower tiers and requiring non-enrolled parties to carry residential-eligible coverage with completed operations additional insured status for the full defect period. For the GC's annual program around a wrapped job, see [residential general contractor insurance](https://mycontractorsinsurancequote.com/who-we-serve/residential-general-contractors). ## Before You Ask for a Quote ### What to Gather - Unit count, product type and phasing plan, with the for-sale and for-rent split - The draft wrap terms: limits, aggregate structure, completed operations extension and retention - Subcontract templates, insurance exhibits and any retention contribution clause - The trade list with expected enrolled and excluded parties, including lower tiers - Prior defect claims history for the builder and the GC, with association claims noted - Lender and equity partner insurance requirements for the project ### What to Ask the Insurer or Surety - Does the aggregate apply per building, per phase or across every unit on the policy? - How long is the completed operations extension, and do the excess layers match it? - What is the basis for triggering the deductible or retention on a multi-unit defect claim? - Which trades and operations will the carrier exclude from enrollment? - What coverage must non-enrolled trades carry, and will their forms accept residential work? - How will the carrier handle a statutory defect notice before suit is filed? ## Broker Notes **Quick Answer:** A residential wrap puts the builder, GC and enrolled trades on one liability program for a for-sale project; its value depends on the completed operations term, the aggregate and how many units share it. **Common Mistake:** Accepting one shared aggregate across several buildings or communities without asking how much will remain when late-tail association claims arrive. **Broker Perspective:** On for-sale work, a broker reads the wrap from the end of the tail backward: who is insured in year nine, under what limits and which trades were never enrolled. **Coverage Impact:** A wrap may reduce reliance on trade policies with residential exclusions, but excluded parties, off-site work and an eroded aggregate can still leave the builder exposed. ## Questions Buyers Ask ### Why do condo builders use wraps more than apartment developers do? For-sale condominiums end with many owners and an association that can pursue defect claims for common areas for years, and many trade policies restrict condominium work. A wrap gives the builder one carrier that agreed to insure that exposure. An apartment owner keeps the asset and its claims, so it often weighs a project policy and strong subcontract terms against wrap administration. ### What does a California builder have to tell trades about a residential wrap? Civil Code §2782.95 requires the contract documents to disclose the premium credit or its calculation method and, to the extent known, the limits, scope, term and deductible trigger. If the policy insures more than one work of improvement, the documents must also show the units on the application and an insurer estimate of remaining limits as of a stated date. ### Can we still charge a subcontractor part of the wrap deductible on a California tract? Civil Code §2782.9 allows a reasonably allocated contribution toward the retention or deductible if the maximum amount and collection method are in the participant's contract. It may be collected only when the retention is incurred, after written notice, in proportion to the claim tied to that scope, and total contributions cannot exceed the retention due. ### Do Texas wrap disclosure rules apply to a single-family subdivision? Generally not. Texas Insurance Code §151.001 excludes a single-family house, townhouse, duplex or directly related land development from the chapter's definition of construction project. A condominium building is not on that list, so a Texas condo wrap may be treated differently. Have counsel confirm how the chapter applies to your product type before issuing enrollment documents. ### What happens to a residential wrap's limits when one building has a big claim? It depends on the aggregate structure. If one products-completed operations aggregate sits behind every building, a large claim on one building reduces what remains for all of them. Separate aggregates by building or phase, if the market will offer them, keep one loss from consuming the protection the other buyers depend on. ## Official Sources 1. [Cal. Civ. Code §2782.95 (residential wrap-up disclosures)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV§ionNum=2782.95), California Legislative Information. Disclosure of premium credit, limits, scope, term, deductible trigger, unit count on multi-project policies and remaining-limits estimate; bid not binding without credit disclosure Verified 2026-10-24. 2. [Cal. Civ. Code §2782.9 (indemnity and retention contributions on residential wraps)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV§ionNum=2782.9), California Legislative Information. Indemnity for covered claims unenforceable; equitable indemnity where no wrap coverage; conditions on retention contributions; no waiver Verified 2026-10-24. 3. [Cal. Civ. Code §941 (time limit for actions under the residential defect title)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV§ionNum=941), California Legislative Information. 10 years after substantial completion; includes indemnity actions Verified 2026-10-24. 4. [Tex. Ins. Code ch. 151 (consolidated insurance programs)](https://statutes.capitol.texas.gov/Docs/IN/htm/IN.151.htm), Texas Legislature. Definition of construction project excludes single-family house, townhouse, duplex and related land development; 10-day disclosure; three-year completed operations minimum Verified 2026-10-24. 5. [Tex. Prop. Code ch. 27 (Residential Construction Liability Act)](https://statutes.capitol.texas.gov/Docs/PR/htm/PR.27.htm), Texas Legislature. Notice before the 60th day preceding suit, inspection and settlement offer; contribution rights against notified subcontractors under §27.004(p) Verified 2026-10-24. 6. [A.R.S. §12-1362 (dwelling actions; insurer treatment of notice)](https://www.azleg.gov/ars/12/01362.htm), Arizona State Legislature. Insurer must treat a §12-1363 notice presented by the seller or construction professional as a notice of claim Verified 2026-10-24. ## Related Decisions - [owner-controlled insurance programs](https://mycontractorsinsurancequote.com/wrap-up-insurance/ocip) - [rolling wraps for phased communities](https://mycontractorsinsurancequote.com/wrap-up-insurance/rolling-wrap-ups) - [residential project insurance](https://mycontractorsinsurancequote.com/projects/residential-construction) - [multifamily developer insurance](https://mycontractorsinsurancequote.com/who-we-serve/developers-subdividers/multifamily-developers) - [wrap-up or project policy comparison](https://mycontractorsinsurancequote.com/resources/ocip-ccip-vs-project-liability) --- Start a quote request: https://mycontractorsinsurancequote.com/get-a-quote · Call 844-978-7283 Contract and insurance reviews are a courtesy service that may be available at times, depending on our workload and on the size, timing and complexity of the project. A review is not guaranteed and is limited to insurance considerations. It is not legal advice and is not a substitute for advice from your own legal counsel, which you may need before signing a contract or obtaining coverage. Insurance and surety services are provided through Gleason Insurance Brokers, LLC. Site information is educational and does not constitute legal advice, a binder, an offer of coverage, a guarantee of eligibility or confirmation of policy terms. Insurance conditions are governed by actual issued policies; surety rights and obligations are governed by bond and indemnity documents.