What Is an OCIP (Owner-Controlled Insurance Program)?

An Owner-Controlled Insurance Program (OCIP) is a single, comprehensive insurance policy purchased by a project owner for a specific construction project. This program is designed to cover most, if not all, contractors and subcontractors working on that project. The primary aim of an OCIP is to streamline insurance management and potentially enhance project control for the owner.

Understanding Owner-Controlled Insurance Programs

An Owner-Controlled Insurance Program, often referred to as a “wrap-up” or “wrap policy,” centralizes the insurance coverage for a construction project under one policy controlled by the project owner. This means the owner acts as the policyholder and takes on the responsibility for managing the overall insurance program. Historically, OCIPs were primarily used for large-scale construction projects, though they are now increasingly utilized for smaller projects as well.

In a traditional construction insurance model, each contractor and subcontractor would obtain their own individual insurance policies. With an OCIP, these individual policies are largely replaced by the single, overarching policy for work performed on the covered project site. This approach creates a consolidated program that includes all required insurance coverages and risk management services. It ensures that all enrolled parties are covered under a unified set of terms and limits, reducing potential coverage gaps and overlaps.

Key Elements of an OCIP

An OCIP includes several types of insurance coverage to protect all eligible parties involved in a construction project. Commercial General Liability (CGL) is a primary component, covering third-party bodily injury and property damage on the worksite. Workers’ Compensation (WC) is also a standard inclusion, providing coverage for employee injuries sustained on the project site.

Beyond these, Excess or Umbrella Liability insurance is commonly part of an OCIP, offering additional coverage limits above the primary General Liability and Workers’ Compensation policies. Other coverages, such as Builder’s Risk, which covers damage to the property under construction, and Professional Liability, for errors or omissions by design professionals, are included depending on the project’s specific needs. The OCIP functions as a master policy that enrolls the project owner, general contractor, and all participating subcontractors under its terms.

Operational Flow of an OCIP

The functioning of an OCIP involves several administrative steps. The program is managed either by the project owner’s internal team or by a third-party administrator (TPA). This administrator ensures all contractors and subcontractors are properly enrolled.

Enrollment begins with specific instructions in the bid documents, outlining the OCIP’s coverage and requirements. Once enrolled, claims, such as worker injuries or property damage, are reported and managed centrally under the OCIP’s single policy. Centralized claims handling involves a single claims adjuster, which streamlines the resolution process and reduces disputes among multiple insurers. OCIPs integrate project-wide safety programs and risk management initiatives, enforced across all participating entities.

Reasons for OCIP Adoption in Construction

Project owners adopt OCIPs for several strategic reasons. One primary motivation is centralized risk management, providing consistent and broad coverage for all parties and eliminating potential gaps or overlaps from individual policies. This unified approach ensures adequate protection across the entire project.

OCIPs also allow owners to implement and enforce project-wide safety standards and training programs. This enhanced control over safety reduces accidents and associated claims. Cost efficiencies are achieved as owners negotiate better insurance rates by leveraging the overall size of the project, leading to volume discounts. A single policy also streamlines the claims process, avoiding prolonged disputes between various insurers and reducing litigation among project participants.