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Owner or Contractor Controlled Insurance Programs typically include commercial general liability coverage and workers’ compensation insurance to protect the property owner and other interested parties on the policy from liability losses.
- Commercial General Liability Insurance (CGL): This is designed to cover a wide range of liability risks, including third-party injuries on the worksite and property damage caused by workers on the project.
- Workers’ Compensation Insurance: This is required in most states and is regulated by the laws of the state in which you operate. It is designed to cover lost wages and the cost of treatment associated with work-related injuries and illnesses. When included in an OCIP, it will cover all enrolled contractors and subcontractors on your project.
Beyond those two mainstays, project owners typically include additional coverage in the CIP insurance portfolio. These coverages frequently include the following:
- Pollution Liability Insurance: Can cover the costs associated with chemical spills, the emission of toxic gases and fumes, and other pollution-related incidents that may occur in the course of completing your project. These costs may include those associated with lawsuits brought about by resultant illnesses and injuries as well expenses related to clean-up.
- Builders Risk Insurance: Designed to cover damages to the building under construction caused by such things as accidental fires or severe weather events.
- Professional Liability Insurance: Covers against losses resulting from errors in judgement and other professional mistakes by named insureds in professional positions.
- Umbrella Insurance: The liability coverage limits offered by many commercial insurance policies are not always high enough to fully cover commercial enterprises against all of their potential risks. To ensure that you have a sufficient amount of liability coverage, you may want to increase your coverage by supplementing your OCIP insurance with umbrella coverage.
What’s not covered by OCIP plans?
The following are typically not covered by owner controlled or contractor controlled programs and would therefore be the responsibility of your contractors and subcontractors:
- Commercial Vehicle Liability Insurance: Many construction projects require the use of specialty construction vehicles. These vehicles will require coverage under a commercial vehicle insurance policy.
- Commercial Property Insurance: This is designed to cover loss or damage to the commercial property (such as tools and machinery) used on-site by all contractors and subcontractors named on your policy.
- Inland Marine Insurance: This is designed to cover tools and machinery while they are being transported to and from the job site.
The Mahoney Group, based in Mesa, Ariz., is one of the largest independent insurance and employee benefits brokerages in the nation. Contact us at news@mahoneygroup.com or 480-730-4920.
This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.