What is an Owner Controlled Insurance Program?
By: Jason Jones
President
What is an Owner Controlled Insurance Program?
An Owner controlled insurance program is a method of insuring the construction project risk of the owner, contractor, and subcontractors of every tier. The most successful programs inevitably result from a joint effort of all project participants. All levels of the organization are committed to safety with clear program expectations.
A well-built OCIP will provide a robust safety management system where all the contractors are operating under the same specifications and processes as it relates to site safety. The most successful Owner controlled insurance programs excel executing the risk management categories below;
Critical Elements
- Bid specifications
- OCIP safety manual
- Contractor selection (pre-qualification system)
- Team selection process for personnel
- Pre-bid and pre-construction meetings
- Contractor onboarding process
- Risk management plan also known as an Activity Hazard Analysis
- Safety leadership training
- Event management system
- Employee and leadership engagement systems
- Policy and Guidelines
- Safety performance measurement system
- Safety technology and communication systems
- Real-time data collection and sharing with the ability to implement effective change management into operations
A Successful OCIP Can Save the Owner Between 1 to 3 Percent of the Total Construction Hard Cost
Why Consider an Owner Controlled Insurance Program (OCIP)?
Broader Coverage – The Insurance Broker will negotiate with insurers on behalf of all participants, with Owner’s best interests represented and with the goal of obtaining coverage specific to the actual project risks.
Uniformity of Coverage – An OCIP assures Owner that all participants have the required coverage which eliminates gaps in coverage.
Dedicated Limits – An OCIP eliminates the concern that the Contractor’s individual policies may not respond because the Owner would not know if the aggregate limits on those policies were eroded by prior losses.
Insurer Stability – An OCIP for Owner provides coverage for all participants with an insurer of high
financial ratings. Many insurers of small or high-hazard contractors do not have the kind of financial strength on which an Owner may rely on.
Coverage Disputes, Litigation and Subrogation – An OCIP insures all eligible participants under a single insurance program, reducing the potential for litigation between participants insured under multiple policies (and all with their own best interests at stake when a claim arises). Under an OCIP, Owner would control all claim decisions and thus, resolution would be made in your best interest.
Enhanced Risk Management, Safety & Loss Control – An OCIP provides a unified risk control and safety program for all participants. It eliminates confusion and promotes a safer job site as compared to numerous insurance companies (representing each contractor) providing inconsistent and often conflicting advice.
Improved Certificate of Insurance Tracking – An OCIP tracks off-site and automobile certificates of every enrolled contractor on the site, ensuring adequate coverages in conjunction with the CIP-related coverage.
Claims Management – An OCIP provides enhanced claims management techniques to all participants, often resulting in lower loss dollars paid and lower experience modification rates. Individual Contractors may not have return-to work programs, modified duty programs, effective medical bill reviews, on-site first aid or other attributes that can greatly reduce claim costs.
Improved Public Relations – An OCIP improves job site safety performance, claims management, benefiting Owner with positive public reaction to your projects.
When considering an OCIP you will need to select an insurance broker best suited to serve your project. Many Owners have an existing insurance relationship with a trusted insurance broker, but not every broker is familiar with an Owner Controlled Insurance Program. Here is a list of the top 15 largest insurance brokers https://www.thebalancesmb.com/world-s- largest-insurance-brokers-462396
To learn more about Trinity Safety Group’s OCIP project successes click here https://www.trinitysafetygroup.com/our-work