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Owner-Controlled Insurance Programs (OCIP)

Owner-Controlled Insurance Programs (OCIPs) are widely and effectively used on public sector construction projects and capital improvement programs throughout the United States.

Through an OCIP, a project owner provides general liability insurance and workers’ compensation for the duration of the project for all parties involved. The policy can also provide coverage through the full statute of repose. Owners also often purchase builders risk, pollution, and professional coverage in conjunction with an OCIP.

OCIP Project Requirements

OCIPs can be used on either large individual projects (greater than $75 million in hard construction costs) or on a “rolling” basis by aggregating smaller projects in a capital improvement program into an OCIP. A “rolling” OCIP can be viable if an entity has as little as $200 million in construction costs over a two- to three-year period.

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Significant Cost Savings

OCIPs offer significant savings by enabling an owner to purchase insurance at a lower cost than its contractors. This removes contractors’ insurance costs—which can range from 2% to 4% of construction costs. And by managing losses effectively, OCIP sponsors typically save between .5% and 1.2% of construction costs.

OCIPs offer significant savings by enabling an owner to purchase insurance at a lower cost than its contractors.

Continuous, Uniform Coverage and dedicated limits

When using an OCIP, an owner no longer needs to be concerned about the varying insurance coverage of contractors working on a jobsite. Even though the owner imposes minimum insurance requirements contractually, individual contractor policies can vary greatly and limits of insurance can be eroded by losses from projects of multiple owners.

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Greater Flexibility

An OCIP allows an owner more flexibility when selecting contractors since a contractor’s ability to meet minimum insurance requirements is removed from the equation. This both increases the size of the contractor pool available to the owner and assists in outreach programs for small and disadvantaged business enterprises.

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