What Is an Owner Controlled Insurance Program (OCIP)?
An owner controlled insurance program is a single insurance plan designed to cover nearly all liability arising from a construction project. OCIPs combine the coverage benefits of several key insurance policies normally used for construction projects—including general liability, workers’ compensation, excess/umbrella liability, builders risk, and more—into a single policy.
OCIPs are a type of controlled or consolidated insurance program (CIP), interchangeably referred to as a wrap-up insurance plan. CIPs are called wrap-up insurance programs because they allow coverage for multiple parties and from multiple policies to be wrapped up, or bundled, into a single insurance plan.
CIPs, or wrap-ups, can be purchased by the property owner, the contractor(s), or both. Consolidated insurance programs that are purchased by the contractor are known as contractor controlled insurance programs (CCIP).
It is also possible for multiple parties involved with the project (for instance, the owner and the lead contractor) to jointly sponsor the insurance program. In this case, the program is referred to as a partner controlled insurance program (PCIP)
OCIP advantages to owners over traditional insuring methods
An OCIP may provide a number of advantages to a construction project owner, including:
- Lower costs to the property owner as bulk purchase of insurance lowers total cost
- OCIP broker and underwriting insurer will enforce stringent safety and loss control procedures
- Reduction in time required to obtain insurance certificates for contractor
- Improved monitoring of threats and claim handling
- Direct input into policy design and structure as opposed to relying on the terms and conditions of the contractors (particularly in relation to additional insured security for contracting parties) which may lead to coverage gaps or inadequate coverage amount
OCIP advantages to contractors over traditional insuring methods
As compared to traditional insurance, an OCIP may offer benefits that include:
- Potential greater insurance limits and coverage depth and breadth that contractor could not otherwise obtain
- Potential for contractor to work on projects that contractor could not otherwise obtain
Contact us today and let our insurance experts guide you and your business into the right insurance plan.