Readily determine what an OCIP can protect your project.
Most contractors operating in the United States have participated in an OCIP Insurance. It protects the project owner and is designed to coordinate general liability coverage for all eligible parties working on a specific construction project.
As you may well know, construction jobs come with a number of liability risks. Previously, OCIP (or ‘wrap insurance’) was used only on large construction projects that exceeded $50 million in costs. Today, however, they are frequently used by project owners on smaller residential construction and renovation jobs. As this coverage is a relatively new for residential construction and renovation jobs, it’s understandable that many project managers have a lot of questions about it.
How does OCIP work?
Under an OCIP, the property owner and the general contractor will work out the terms of coverage together. The general contractor will then purchase and pay for the OCIP policy. In return for not having to provide their own liability insurance coverage, contractors and subcontractors may be offered lower rates for their work. Should a claim need to be filed, the project manager will be responsible for contacting the insurance company and paying any deductibles.
What does an OCIP cover?
The basic coverage will be:
- Commercial General Liability Insurance: This is designed to cover a wide range of liability risks, including third-party injuries on the worksite and property damage caused by workers on the project.
- Workers’ Compensation Insurance: As required in most states, Workers’ Compensation is designed to cover lost wages and the cost of treatment associated with work-related illnesses and injuries.
In many cases, additional insurance can be acquired, including:
- Pollution liability insurance
- Builders risk insurance
- Umbrella insurance
What are the benefits of an OCIP?
A well-constructed OCIP provides many benefits, including:
- Broad coverage and uniform limits for contractors of every tier
- Claim adjustments by one insurer
- Coverage stability for completed operations through the applicable statute of repose
- Immediate policy response to a covered general liability claim without the need to first assign fault among covered contractors if the cause is not immediately clear
- The support of rigorous loss control programs, which often include safety incentive programs to provide recognition and sometimes monetary rewards to contractors and their employees for a strong safety performance
Is an OCIP right for me?
Generally speaking, if you will be managing a large construction project with a handful of contractors and subcontractors, then an OCIP may be the best way to protect your project. To know exactly which policy is right for you, contact the professionals at Nahai Insurance Services. We can help you determine your coverage needs and protect your project, all at the right cost.