Bundling insurance typically lowers the overall premiums and reduces markup on contractor and subcontractor policies as well. Whether the policy is controlled by a contractor or owner, an OCIP or CCIP policy reduces project overhead. “So, until that self-insured retention is exhausted, the insurance won't step in.” 4 key benefits of OCIP/CCIP insurance 1. “The insurance is truly excess of the SIR,” says Joshua Rogove. The policyholder is responsible for paying for losses up to the SIR amount before filing a claim with the insurance provider. SIR is a fixed amount that is totally separate from - i.e. The deductible on a CIP policy works the same as any other insurance policy: When the policyholder files a claim, the insurance company will assess the loss value and submit a claim payment (if applicable) and then recoup the deductible obligation from the insured. However, there are key differences between the two. These are amounts that the policyholder is responsible for paying directly, that the insurance company will not cover. Deductibles & self-insured retentionĪ controlled insurance program will typically include a deductible or self-insured retention (SIR) - or sometimes both. The cost of the premiums will also be affected by the amount of the deductible, and whether the policy includes self-insured retention. The actual premium is based on various risk factors, including policy limits, types of coverage, project location, type of construction, and value of the project. The cost for CCIP and OCIP coverage typically varies from 2% to 12% of construction costs. These companies must provide their own insurance. However, some subcontractors may be excluded from coverage, especially if they have a high modification rate, or perform high-risk work, like hazardous material operations, demolition, blasting, or abatement.Ī CIP also typically does not cover material suppliers, haulers, and truckers. Coverage exceptionsĪ CCIP or OCIP policy will typically cover all contractors on a project, including subcontractors. “I like to call them ‘Wrap-ups for Rookies,’ based upon the distribution (wholesale vs retail), smaller job size required for these programs (to make financial sense), as well as the lower retention and lack of collateral typically associated with these programs," Rogove says. While a CIP is customizable, “general liability-only” wrap-ups have become more popular in the last few years, according to Joshua Rogove, President of CR Solutions. Policies including workers’ compensation coverage are utilized on projects with a hard construction value of at least $100 million (in most states). “General liability-only” Controlled Insurance Programs are generally only used on large projects with a hard cost construction value of $25 million or more. Most also come with a completed operations tail that protects the project until the statute of limitations for claims has expired.Īdditional coverage can be added alongside these wrap-up policies, including builder's risk, installation floaters, professional liability, and subcontractor default insurance. These base policies protect the project from third-party bodily injury and property damage claims, as well as worker injury claims. In monopolistic states, where workers' compensation is run through the state, CIPs are available without this coverage. They are also frequently written to include umbrella insurance and workers' compensation insurance. There are two types of controlled insurance programs:ĬCIP and OCIP typically provide general liability coverage for all parties on a project. Because activity on the project is covered by the wrap policy, a sub’s insurance provider should remove the exposure correlated with the wrap-up job from their existing premiums. Instead, they are issued a certificate to show that they have been enrolled in an OCIP/CCIP project. With a project that has wrap coverage, subcontractors do not need to provide their own insurance. This policy covers all project parties, including the general contractor, subcontractors, sub-subcontractors, and the project owner. What is a Controlled Insurance Program (CIP)?Ī Controlled Insurance Program (CIP), also called wrap-up or wrap insurance, is an insurance package designed to cover all liability and losses during an entire construction project, or across multiple projects.
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