Owner-controlled Insurance Program

Owner-controlled Insurance Program

An owner controlled insurance program (OCIP) is an insurance policy held by a property owner during the construction or renovation of a property, which is typically designed to cover virtually all liability and loss arising from the construction project (subject to the usual exclusions). The policy package usually contains Commercial General Liability Policy, Workers Compensation policy with employers liability and depending on the project or program in place there are specific forms outlining coverage via forms endorsement. Also known as a "Wrap-Up" in the industry.

The traditional method for insuring construction consisted of each general contractor and sub-contractor obtaining their own insurance policies from any provider of their choosing. In turn, they would build their policy premiums into their cost structure, which in turn became part of their bids. This meant that by accepting a general contractor's successful bid, the property owner was indirectly paying for administrative overhead at dozens of separate insurance brokers and insurance companies.

In OCIP, all construction, materials, hazard, workers' compensation, terrorist, and other building-related insurance is purchased by the property owner as part of a single policy from a single insurer. Thus, property owners benefit from OCIP in that all insurance costs are collected into one transparent policy premium rather than spread across the bids of dozens of contractors and subcontractors, and they have direct control over administrative costs by dealing with a single broker and insurer.