As a current or former stakeholder on a large construction project, you’ve likely heard about Owner-Controlled and Contractor-Controlled Insurance Packages (also referred to as OCIPs and CCIPs). Each of these are similar forms of “Wrap Up Insurance”, which is a consolidated insurance policy typically implemented on large construction projects (or series of related projects) that exceed $10 million in total costs. 

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What are the differences between OCIPs and CCIPs?

When looking at the two policy types side by side, they are nearly identical from a functional standpoint; the key difference between them comes down to who actually procures and pays for the coverage. As their names would imply, OCIPs are sponsored by project owners, whereas CCIPs are paid for by the lead contractor on a project. 

What are the benefits of having Wrap Up Insurance through an OCIP or CCIP?

Under either policy type, Wrap Up Insurance provides comprehensive coverage for all owners, contractors, and subcontractors working on the site, which eliminates coverage gaps, as well as the risks that can arise when all workers are expected to provide their own liability insurance.

This also helps to lower insurance costs, both in the short and long run. In the near term, Wrap Up Insurance is almost always cheaper than what it would cost to purchase individual policies for all workers.

Thinking longer term, you can reduce future insurance costs if you ensure that your Wrap Up policy is written on a loss-sensitive basis. Under this approach, your insurance company will adjust your premiums based on your claims history. Because Wrap Up policies are designed to help you create better safety packages, limit coverage gaps, and ensure all workers are covered, you’ll be in a better position to decrease your premium costs over time.

In the event of a lawsuit, a Wrap Up policy also eliminates the friction that could arise between the many individual entities on a site. Because the insurance covers every stakeholder on a site, legal costs and other litigation headaches can be minimized or avoided completely.

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What do OCIPs and CCIPs cover?

Whether your site is protected by an OCIP or a CCIP, Wrap Up Insurance typically includes some combination of the following coverage types:

• General Liability Insurance: These policies provide protection from a variety of claims, including injury or bodily harm and property damage. In the case of a lawsuit, this policy will also cover your defense costs, as well as any money you are found to owe in a judgment or settlement ruling. 
• Workers’ Compensation Insurance: Covering the costs related to workers who are injured on the jobsite, these policies provide compensation to cover lost wages, medical bills, and other rehabilitation costs.
• Builders Risk Insurance: These policies insure both the structures being built, as well as all of the materials on site, in the case of damages caused by outside forces, such as vandalism, fire, natural disasters, or bad weather.

Depending on the particulars of the project and the region where it is being built, stakeholders may elect to include other optional coverage types in their Wrap Up policy:

• Completed Operations Insurance: These policies provide extended protections to workers after the completion of a project, ideally covering all enrolled entities through the appropriate statute of limitations.
• Subcontractor Default Insurance: Similar to surety bonds, these policies protect project sponsors against issues, problems, or failure of the work completed by contractors and subcontractors.
• Professional Liability Insurance: These policies can provide coverage for other professionals who contribute to the project, including architects, engineers, and others. In many cases, however, these professionals will have their own (often better) liability insurance policies, and it might not make good financial sense to loop this type of coverage into your Wrap Up policy.
• Umbrella Liability Insurance (or Excess Liability Insurance): An Umbrella policy will extend the coverage of your existing General Liability Insurance to increase limits and fill coverage gaps.

How much do OCIP and CCIP policies cost?

As you’d expect with any other kind of insurance, the price you’ll pay for your coverage is dependent on the specifics of your situation, including:

• Claims history & reputation for site safety
• Size or scope of the project 
• Number of workers to be covered 
• Project timeline

In any case, insurance is one of the biggest expenses for an enterprise-scale construction project, and finding smart ways to limit these expenses is always top of mind for those with any real skin in the game.

How can Odin help me lower my OCIP and CCIP costs?

As mentioned above, your claims history will play a huge role in how your insurance provider determines your premiums, and insurers are particularly interested in a demonstrated track record for investing in and maintaining safety on your job sites. 

When you partner with Odin, you can powerfully illustrate your commitment to creating a safe work environment on your projects. As the first fully-integrated software platform for managing workforce risk on enterprise-scale construction sites, we capture all of the invaluable data generated on your jobsite and turn it into actionable insights for meaningfully improving site safety and avoiding costly claims.

Here are just a few of the ways Odin puts you in a power position to negotiate better insurance rates: 

• Automate worker compliance to lower risk, minimize claims, and reduce monthly premiums
• Generate comprehensive incident reports quickly and easily
• Compare payroll hours vs actual time onsite
• Lower EMR score with a high level of workforce compliance
• Move towards a data-driven risk model

To date, Odin has been able to reduce our clients total insurance costs by about 10%, and our platform typically pays for itself within 2 quarters of implementation. 

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The Takeaway

Whether the stakeholders on your project select an Owner-Controlled or Contractor-Controlled Insurance Package, the benefits of these Wrap Up Policies are usually well worth the additional administrative investment required to create a package that adequately meets your project’s needs. 

And while insurance costs are likely to remain one of the larger line items in your project budgets for the foreseeable future, there are ways to meaningfully reduce those costs. Partnering with a smart platform like Odin, for example, who can help you reduce risk and automate other essential aspects of compliance, can be a worthwhile investment that pays for itself relatively quickly. 

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