Owner Controlled Insurance Program (OCIP)
A wrap-up insurance program purchased by the project owner that provides coverage for all contractors working on a construction project.
What It Is
An Owner Controlled Insurance Program (OCIP) is a wrap-up insurance arrangement where the project owner purchases a single insurance program that covers the owner, general contractor, and all eligible subcontractors working on a specific construction project. The program typically includes CGL, workers compensation, and excess/umbrella coverage.
OCIPs centralize insurance for the entire project under one program, eliminating the need for each contractor to provide their own coverage for the project. This can reduce the total cost of insurance, improve claims management, and provide uniform coverage terms across all project participants.
The project owner pays the premium and administers the program through a specialized wrap-up administrator who handles enrollment, reporting, and claims coordination.
Why It Matters for Brokers
Brokers involved in large construction projects must understand OCIPs because they fundamentally change how insurance is structured for the project. When a client's subcontractor is enrolled in an OCIP, the subcontractor's own policies must be endorsed to exclude the OCIP project, and their certificates must reflect the wrap-up arrangement. Brokers who advise project owners on OCIP feasibility and structure can provide significant value on large projects where insurance costs represent 1-3% of total project cost.
Real-World Example
A hospital system is building a $120M medical center. The owner's broker recommends an OCIP based on analysis showing that centralizing insurance will save approximately $1.8M compared to having each of the 35 subcontractors provide their own coverage. The OCIP provides $2M/$5M GL, statutory workers comp, and $25M excess across all enrolled contractors. The broker administers the enrollment process and coordinates with each sub's insurance broker to ensure proper policy exclusions.
Common Mistakes
- 1Not enrolling all eligible subcontractors in the OCIP, leaving gaps in the wrap-up coverage and creating coordination issues.
- 2Failing to ensure that enrolled subcontractors' own policies exclude the OCIP project, creating potential duplicate coverage and premium issues.
- 3Underestimating the administrative complexity of OCIP enrollment, payroll reporting, and claims coordination.
How brokerageaudit.com Handles This
BrokerageAudit provides wrap-up enrollment tracking and automated certificate management for OCIP projects, ensuring all subcontractors are properly enrolled and their own policies are endorsed to exclude the wrap-up project.