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If you’re a contractor working on a large construction project, you may be notified that you’re going to be covered under a Contractor Controlled Insurance Program (CCIP) or Owner Controlled Insurance Program (OCIP).
These programs are an efficient way to ensure all contractors on a project have liability coverage, but if you are a part of one, you should be aware that they change things when it comes to your business insurance.
At Berry Insurance, several of our business insurance clients have been involved in CCIPs or OCIPs at one point or another, and we’ve been able to help make sure they were in compliance, and fully covered.
So in this article, we’ll explain what CCIPs and OCIPs are, how they affect your insurance, and what you need to know if you become involved in one.
What is a CCIP or OCIP?
Sometimes referred to as wrap-up insurance programs, Contractor Controlled Insurance Programs (CCIP) or Owner Controlled Insurance Programs (OCIP) are blanket insurance policies designed to cover all of the contractors working on a project in one plan. These are most often used on larger projects as an easy way to ensure all contractors have coverage.
Most insurance companies will exclude CCIPS or OCIPs from insurance policies. That means if a subcontractor experiences a claim while working on the project, it will go through the CCIP or OCIP insurance, not the subcontractor’s individual insurance.
What do I need if I’m in a CCIP/OCIP?
If you are involved in a CCIP or OCIP, you will need to take a few steps to make sure you have and are able to prove the proper coverage.
Certificate of insurance:
When you become involved in a CCIP or OCIP, the general contractor or project owner will ask you for a certificate of insurance for your own personal business insurance.
I know what you’re thinking: “Why would I need to prove my own insurance if I’m covered under the CCIP/OCIP?”
Well, this is because the CCIP/OCIP only covers subcontractors while on the job site. For any job-related duties that are completed off-site, the subcontractor would need their own individual liability insurance to cover.
For example, if you’re an iron company building ornamental iron fixtures for a construction site, you would build the fixtures at your business location, then transport them to the job site to install them.
So if there was a claim when installing the fixtures on site, you would be covered by the CCIP/OCIP, but if you had a claim while making or transporting the fixtures, you would need to turn to your own business insurance.
And the project owner wants to make sure you have your own insurance coverage so if you do experience a job-related claim off the job site, you won’t sue them for the damages, which is why they ask for a COI.
To get a COI, you’ll have to reach out to your insurance agent. For more information on how to get one, read this article: What is a Certificate of Insurance and Why Do I Need it?
Review the CCIP/OCIP contract with your insurance agent:
Before you sign your CCIP or OCIP, be sure to send it to your insurance agent to review to make sure you are in compliance, and fully covered.
Your contract may ask for ongoing and completed operations or include terms such as “additional insured,” “primary noncontributory,” or “waiver of subrogation.” Here is what these terms could mean in terms of your CCIP/OCIP.
Additional insured: Your general contractor may request to be listed as an additional insured under the subcontractors policies. It is a way to protect them if there is a claim, so that the subcontractor's policy responds instead of the general contractor’s.
Primary noncontributory: This term is generally used in conjunction with the additional insured wording. It basically means that the subcontractor’s policy limits will be primary, and that the subcontractor's policy won't seek contribution (of coverage/limits) from the general contractor’s policy.
Waiver of subrogation: This means the subcontractor’s policy waives its right to subrogate against the general contractor’s policy in the event of a claim. In other words, if the subcontractor's policy pays out on a claim, it can't recover any money from the general contractor's policy.
Your insurance agent will be able to help you navigate what your contract’s wording means for you.
Ensure coverage and compliance of your wrap-up insurance
When it comes to CCIPs and OCIPs, the most important thing is to be sure you are in compliance with the program, and that you have all the right coverage to protect you if you do experience a claim.
As we mentioned, a good insurance agent should be able to make sure you are checking the boxes next to both of these items. But they can also do several other things to help you manage your business insurance policies, many of which will save you money and time.
To learn more, read this article: Why Your Massachusetts Business Insurance Agent Should Provide More than Just Insurance.
