Construction Wrap-Up Insurance: The OCIP

Wrap-up insurance is the norm among large, complex construction projects. When talking about this type of insurance, it’s important to note that there are two forms, both necessary in different ways. This blog will discuss the Owner Controlled Insurance Program (OCIP) coverage and what it should mean to any construction business, and we will discuss the Contractor-Controlled Insurance Program (CCIP next week). Under both programs, the objective is that most, if not all, construction participants are effectively covered under one insurance program.

Here’s a closer look at the coverage provided by the OCIP:

OCIP Benefits

On average, there was 14 deaths a day, according to statistics from OSHA, with a whopping 21 percent of fatalities happening in construction. Without insurance coverage, accidents can become a huge problem. An OCIP is a great way to have everyone that works for your company under the same roof, or so to speak. Whoever sponsors the wrap-up will ultimately determine the type of controlled insurance program, with the sponsor the one responsible for securing insurance coverage, paying for and administering the program. OCIP benefits include:

  • Cost control
  • Claim control
  • Improved safety
  • Reduced litigation
  • Enhanced and uniform coverage
  • Coverage availability

Other benefits include cost savings and efficiency due to cost control, isolation of risks away from core operational insurance, and the elimination of duplications of insurance coverages. A wrap-up includes General Liability, Workers’ Compensation, and Excess/Umbrella Insurance for all participating contractors on a construction project under one sole policy.

OCIP Challenges

An OCIP has some collateral requirements that one needs to consider. These can include 100 percent pre-payment for any premiums and expected losses, letter of credit, or cash collateral, and the owner should consider each concerning overall cash flow. Wrap-up insurance depends on the size of the construction project and the surrounding state laws. At Haughn & Associates, we can help you determine if wrap-up coverage is needed for your construction project.

Stay tuned for our next blog on the other form of construction wrap up insurance, the CCIP!

About Haughn & Associates

Founded by Michael Haughn in 1986, Haughn & Associates is a full-service, family-owned, independent insurance agency based out of Dublin, Ohio. H&A strives to provide the best possible price and unique insurance solutions across a myriad of industries, including construction, IT, Habitation & Commercial Property, Agriculture, and Engineering. Devoted to providing the best of business insurance, life and disability insurance, personal insurance, employee benefits, and bonds, H&A is proof that success lies in long-standing client relations and satisfaction. To learn more about how H&A can be of service to you, contact us at (877) 802-2278.