Owner-Controlled Insurance Program (OCIP): How an OCIP Can Save Your Business Time and Money

A wrap-up insurance program held by the project owner or asset owner is known as an owner-controlled insurance program (OCIP). Instead of relying on general contractors and subcontractors to obtain their insurance, OCIP insurance is meant to give asset owners the option of insuring an entire project through a single insurance provider.

What Is an Owner Controlled Insurance Program (OCIP)?

An Owner Controlled Insurance Program (OCIP), also known as “Wrap Up Insurance,” is when the owner purchases insurance on behalf of the builder (contractor), as opposed to the customary practice of the contractor purchasing insurance for the contractor and the owner purchasing insurance for the owner. Workers’ compensation, general liability, excess liability, pollution liability, professional liability, builders’ risk, and railroad protective liability are among the insurance categories that are frequently covered. Contractors, subcontractors, construction management, and state employees working on the construction site who have been given the owner’s approval to participate in the program are all covered by insurance. For work off-site, the contractors must carry their insurance and cover any associated deductibles.

It is also conceivable for several project participants, such as the owner and the main contractor, to jointly sponsor the insurance program. In this case, the scheme is known as a partner-controlled insurance program (PCIP).

Since they are the most prevalent, owner-controlled insurance programs will be the focus of this tutorial. Nevertheless, most of the material applies to other consolidated insurance programs.

Additionally, OCIP insurance products integrate several insurance coverages into a single package policy, including

● Standard Liability

● Compensation for workers

● Greater liability

● Construction risk

● Legal responsibility,

● insurance for subcontractors’ default

Project Specifications:

The owner can combine a capital improvement program’s smaller projects into an OCIP on a “rolling” basis for larger projects (those with hard construction costs of $75 million or more). For example, if a business has as much as $200 million in building costs over a two- to three-year period, a “rolling” OCIP may be feasible.

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Substantial Cost Savings:

By enabling an owner to acquire insurance at a cheaper rate than its contractors, OCIPs provide significant savings. This eliminates the 2 to 4 percent of construction expenditures that go toward contractor insurance. Additionally, OCIP sponsors often save 5% and 1.2% of construction costs by properly minimizing losses.

Uniform Coverage and Dedicated Limits:

A contractor’s different insurance coverage while working on a job site is no longer a problem for the owner when using an OCIP. Even when the owner legally stipulates a minimum level of insurance, individual contractor policies might differ significantly, and losses from projects with various owners can reduce insurance limits.

Process Control Claim:

Since only one insurance provider is typically engaged in claims payment, an OCIP gives the owner control over the claims process and significantly lowers cross-litigation.

More Versatility:

The ability of a contractor to satisfy the minimum insurance requirements is no longer a factor when choosing contractors. This expands the pool of contractors the owner has access to and helps outreach initiatives for small and underserved business operations.

What does OCIP cover?

An owner-managed insurance program is made up of a variety of insurance policies, as was previously stated. Therefore, the OCIP should have the same exclusions as the policies that make it up.

Commercial general liability and workers’ compensation are typically covered under OCIP plans. Owners can typically work with their insurance provider to close any required gaps in coverage; however, some coverage is mentioned below.

Commercial General Liability Insurance:

It is a type of insurance that protects businesses from claims arising from accidents or injuries on their premises or as a result of their operations. For example, commercial general liability insurance (CGL) insurance typically covers damages or injuries sustained by third parties, such as customers, clients, or vendors. It may also include coverage for advertising injuries.

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Workers’ compensation insurance:

Workers’ compensation insurance is a type of insurance that provides financial benefits to employees injured on the job or who become ill due to their job duties. In most states, workers’ compensation insurance is typically required by law, and it is intended to cover medical expenses, lost wages, and other related costs that may result from a work-related injury or illness.

The employer pays for workers’ compensation insurance, which is typically required for all businesses, regardless of size or industry. It is intended to protect both the employee and the employer by providing financial support to the employee. At the same time, they cannot work by limiting the employer’s liability in the event of a work-related injury or illness.

OCIP Insurance VS Traditional Insurance

Owner-controlled insurance programs (OCIPs) and traditional insurance protect businesses and individuals from financial losses resulting from accidents or injuries. However, there are some key differences between OCIP insurance and traditional insurance:

  1. Coverage: OCIP insurance is typically used for large construction projects and provides insurance coverage for all contractors and subcontractors working on the project. On the other hand, traditional insurance is typically purchased by individual businesses or individuals and covers only the named insured.
  2. Administration: OCIP insurance is administered by the construction project owner, while traditional insurance is typically purchased and administered by the individual business or individual.
  3. Cost: OCIP insurance can often provide coverage at a lower cost than traditional insurance, as the owner can negotiate better rates with insurance providers due to the project’s large scale.
  4. Scope: OCIP insurance typically provides broader coverage than traditional insurance, as it covers all contractors and subcontractors working on the project. On the other hand, traditional insurance typically covers only the named insured.
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Advantages of OCIP Insurance:

For the OwnerFor Contractors
Decreased Costs:
Since contractors usually charge asset owners for their insurance in any case, buying an OCIP in bulk usually results in significant savings.
Expanded Coverage
As already noted, OCIP policies offer superior protection for any contractor taking part in the project.  
Increased Devoted Limitations
Owners are shielded from losses and claims of wrongdoing by OCIPs, which have far larger limits than what might be available to individual contractors.
Safer Initiatives
Certain safety practices and loss prevention strategies are required for OCIP jobs, making them safer for contractors.
More Rapid Enrollment
Owners can join an OCIP and significantly speed up production instead of waiting for their tenants to set their policies.
Simplified Assertions
If properly managed, OCIPs make it simple for contractors to submit claims and obtain coverage. Contractors are also free from the stress of being at fault.
Getting the Right Coverage
When contractors obtain their insurance, participants have the proper coverage for their scope of work. Owners can get the precise coverage they require with an OCIP policy by working with an insurance agent.
No Accounatbility
Contractors are not held accountable for claims OCIPs are typically dispute-free, in contrast to traditional insurance models where each contractor must obtain their coverage and may engage in insurance disputes involving claims.
Handled Claims More Simply
Who is at fault in a claim is far less important under an OCIP, which results in less litigation and more effective claims processing.
Transparent claims
OCIP will provide a fast and transparent claims process when properly run.
More Access for Contractors
OCIP insurance coverage can open doors where certain contractors might not be qualified for the insurance required to carry out work on a big project, allowing you a more comprehensive range of contractors to choose from.
No Worries About Subrogation
Subrogation is when insurance companies attempt to recoup losses from damages by bringing legal action on behalf of the insured, which is not a concern for OCIP-covered projects. In addition, insurance will not take contractor claims on an owner-controlled insurance plan into account. Therefore, the contractor’s insurance coverage won’t be impacted if they sustain a covered loss on the OCIP-covered project.


An OCIP insurance policy might be a terrific way to lower risk exposure and streamline project production if you are an asset owner. However, getting OCIP coverage from an insurance company can be complicated. Insurance carriers consider several variables when determining rates for each range within your OCIP and evaluating your policy eligibility.

Integrating construction technology into your loss prevention program can increase your eligibility for OCIP insurance coverage while lowering your perceived insurance risk.

The project owner receives the necessary risk protection through OCIPs, which may not otherwise be supplied by the individual contractors while reducing the construction costs. An OCIP strategy also enables the owner to adopt a proactive stance toward the risks and the accessibility of risk-mitigation options, such as insurance. You should examine other insurance packages depending on the project’s location and other factors.

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