Alaska opens wrap-up insurance to large condo and townhouse projects
Alaska opens wrap-up insurance to large condo and townhouse projects
2026-09-08 · Alaska · Legislation
Alaska has extended its wrap-up insurance statute to cover large condominium, townhouse and cooperative construction projects — a change buried in the back sections of an omnibus insurance bill and indexed under no heading that mentions community associations.
SB 132 was signed on June 24, 2025 and enrolled as Chapter 17, SLA 2025. Most of the Act took effect January 1, 2026; the three sections that matter here took effect immediately on signature.1
What a wrap-up policy is
A wrap-up — an owner-controlled or contractor-controlled insurance program — is a single policy purchased by the project owner or general contractor that covers every enrolled contractor and subcontractor on a construction site, in place of each trade carrying its own general liability cover. Alaska regulates them at AS 21.36.475.
Before this amendment, that statute allowed a wrap-up only for “a major construction project.” Residential construction with multiple eventual owners did not clearly qualify.
What the measure does
Sections 69 through 71 of SB 132 amend AS 21.36.475. Section 69 extends eligibility to “a major multi-owner residential construction project.” Section 71 adds a new definition at AS 21.36.475(c)(7) setting out what that means: “a construction project for condominiums, townhouses, cooperative housing developments, or other residential housing involving at least 40 units and three or more property owners with a total cost of $20,000,000 or more.”2
The definition names condominiums and cooperatives expressly. It is the only place in the 34th Legislature's entire output where the word “condominium” appears in enacted text outside a probate cross-reference.
Why this reaches associations, not just developers
A wrap-up is bought before an association exists, by a developer, for a building the association will later own and have to insure. The connection runs through construction defects.
When defects surface in a completed Alaska condominium — envelope failures, roofing, drainage, structural work — the association is typically the party that discovers them, because it owns and maintains the common elements. Whether there is insurance behind the contractors who did the work, years after they have finished and possibly dissolved, determines whether a defect claim has a source of recovery or is simply a special assessment waiting to happen.
A wrap-up consolidates that coverage into one program with one set of limits and one extended completed-operations tail, rather than a stack of separate policies from a dozen subcontractors on varying terms. That consolidation cuts in both directions, and an association inheriting a building built under one should understand which.
The shared-limit problem. Every enrolled contractor draws on the same limits. A large early claim can erode the pool available for a later one. Where each trade carried its own policy, each brought its own limits.
The tail is the whole question. Construction defects in a cold-climate building often do not present for several winters. Whether a wrap-up's completed-operations coverage still responds at that point depends on the length of the extension the developer purchased — a term fixed years before the association takes control, and one an association can only discover by asking for the policy.
This is a document worth requesting at transition from declarant control, alongside the other construction records. It bears directly on what an association's own insurance program has to absorb and on how a board plans reserve funding for building components whose defect exposure may or may not sit with someone else.
The threshold that did not pass
The same concept moved through the House in 2025 as HB 148, a parallel omnibus insurance bill from the House Labor and Commerce Committee. Its version of the definition set the bar higher — 50 units and $25,000,000, against the 40 units and $20,000,000 that became law. HB 148 died in House Finance, its last action recorded May 16, 2025.3
The gap between the two is not trivial in a state with Alaska's building stock. A 40-unit threshold reaches a materially larger share of Alaska multifamily projects than a 50-unit one.
What to watch next
The provision is permissive, not mandatory: it makes a wrap-up available for qualifying projects, it does not require one. Whether Alaska developers actually use it is an open empirical question, and the answer will show up in project insurance filings and in the construction records associations receive at transition — not in any published state report.
Nothing in the amendment changes what an association must carry under AS 34.08 or under its own declaration. It changes what may exist behind the contractors who built the building.
Related Alaska HOA Topics
- SB 132, 34th Alaska State Legislature — bill detail and history (Chapter 17, SLA 2025; signed June 24, 2025) ↩
- HCS CSSB 132(FIN) am H, enrolled text — sections 69–71 amending AS 21.36.475, including the AS 21.36.475(c)(7) definition of a major multi-owner residential construction project ↩
- HB 148, 34th Alaska State Legislature — bill detail and history (died in House Finance; version B carried a 50-unit, $25,000,000 threshold) ↩
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