Insuring all of the risks associated with large-scale construction projects is a complicated business.
The typical approach requires each party to procure and maintain separate coverage. Risk is then pushed downstream — from owners to general contractors, and from general contractors to subcontractors — through contractual indemnifications, contractually mandated minimum insurance requirements, and additional insured provisions.
Because of the number of policies and insurers involved, this approach is often more expensive, lacks transparency, and can create the potential for unforeseen liability gaps. Some parties may have inadequate limits, gaps in coverage, or no insurance at all.
Moreover, because there are multiple insurance companies covering one project, each claim has the potential to cause costly and time-consuming cross-litigation.
There is a better way, one that covers everyone, offers an opportunity to save on premiums and secure better coverage terms and limits: an owner-controlled insurance program, OCIP, or a contractor-controlled insurance program, CCIP.