Understanding Owner-Controlled Insurance Programs (OCIPs)
In large-scale construction projects, risk management is a central concern, not only for contractors and subcontractors but also for the project owner. One strategy increasingly adopted to streamline insurance coverage and improve cost efficiency is the Owner-Controlled Insurance Program (OCIP). An Owner-Controlled Insurance Program (OCIP) is a consolidated insurance policy purchased and managed by the project owner, rather than each contractor or subcontractor obtaining their own separate policies. OCIPs typically cover:
- Construction All Risks
- General Liability
- Workers’ compensation
- Excess/Umbrella liability
- Completed operations liability (for a set term post-construction)
This centralized policy covers all or most of the contractors and subcontractors working on a specific construction project, hence why OCIPs are often referred to as “wrap-up” programs.
Why Use an OCIP?
The primary purpose of an OCIP is to control insurance costs, reduce litigation, and streamline project oversight. In traditional construction insurance setups, each contractor provides their own coverage, which leads to redundant premiums, inconsistent coverage, and fragmented safety oversight. OCIPs solve these issues by offering:
- Cost savings from bulk insurance purchasing
- Uniform coverage terms for all project participants
- Centralized safety and risk control programs
- Reduction in cross-litigation among contractors
Benefits of OCIPs
Cost Efficiency: By eliminating duplicate insurance costs and consolidating policies, OCIPs often lead to significant savings—especially for large or complex projects.
Standardized Coverage: All enrolled parties receive consistent insurance limits and terms, reducing gaps or overlaps in coverage.
Streamlined Administration: The project owner (or their insurance broker) handles policy issuance, certificate tracking, and claims. This simplifies what would otherwise be a complicated patchwork of individual contractor policies.
Enhanced Safety Oversight: A centralized approach encourages a uniform jobsite safety culture and reduces the frequency and severity of claims.
An Owner-Controlled Insurance Program can be a powerful tool for managing construction risk, improving cost-efficiency, and ensuring consistent insurance coverage across all tiers of contractors. However, OCIPs require thoughtful planning, strong administration, and clear communication among all parties involved. Project owners considering an OCIP should work closely with experienced insurance brokers and legal counsel to design a program that aligns with the project’s goals, risk profile, and complexity.
