If you’re a construction developer, project owner, or general contractor, you’re familiar with the world of wrap ups. Owner Controlled Insurance Programs (OCIPs) and Contractor Controlled Insurance Programs (CCIPs) consolidate insurance coverage for contractors and subcontractors working on a job site into one blanket policy, purchased and controlled by the developer, project owner or general contractor. They can be purchased for individual projects or on a rolling basis, where covered projects are aggregated over a specific time period.
OCIP’s and CCIP’s (also known as “Wrap Ups”) may eliminate the need for individual contractors and subcontractors to obtain their own specific coverage for the project, ensuring adequate insurance coverage is in place and protecting against unknown lapses, exclusions, or limitations of coverage.
However, since CIPs provide specific coverage to enrolled parties, there are still a few things that aren’t included in that blanket coverage. “Wraps” provide coverage for work performed on-site, such as General Liability only or General Liability and Workers Compensation, requiring evidence of other important insurance policies to be provided by the contractor or subcontractor. Since it’s the developer, owner, or contractor of a project that sponsors a CIP, all parties should have a clear understanding of what is covered and what still needs to be tracked outside of the CIP’s coverage.
Although the CIP provides certain on-site coverage, it’s important to have evidence of the contractor or subcontractor’s policies to protect all parties against potential claims, outside of what the CIP covers. In addition, most CIP carriers require all enrolled parties to carry specific insurance coverage outside of the CIP’s blanket. Here is a quick list of additional insurance coverages that are commonly required during a CIP for parties that are eligible, enrolled and covered by the wrap up:
- Auto: If your contractors or subcontractors are driving on-site with vehicles used for their operations, it’s a good idea to require evidence of auto liability coverage. Typically, auto liability falls outside of the CIP’s coverage. This will protect your company from being on the hook in case of an accident on site.
- Professional liability for some trade types: Certain subcontractors and tradespeople might require extended insurance coverage outside of the general liability provided by an OCIP or CCIP. During the hiring process, check with your subcontractors to see what’s required.
- Pollution liability for some trades types: Construction sites are infamous for pollution and environmental exposures, which aren’t typically covered under the general liability policy. If a contractor or subcontractor has environmental risks associated with their trade or operations, requiring pollution liability is very important. If you are unsure if this coverage is necessary, take a look at our Pollution Liability blog post
- Riggers liability for some trade types: If your project involves moving extremely large or heavy objects, often with the assistance of a crane, derrick or chain hoists , Riggers Liability insurance might be required. While CIP insurance carriers might require specific endorsements or documentation, all riggers aren’t always covered.
- Workers Compensation and Employers Liability: If the OCIP or CCIP is a General Liability only wrap up, your contractors and subcontractors will need to provide Workers Compensation and Employers Liability to protect their company and cover their employees working on-site, for work related injuries or disability.
- Off-Site General Liability: The CIP provides coverage for bodily injury and property damage on-site only. Off-site General Liability provides protection from bodily injury or property damage that may arise from work performed off the jobsite. For example, traveling TO or FROM the jobsite, property damage while off the jobsite due to the operation of the insured “remotely related” to the job.
What if I’m not enrolled in a CIP?
Excluded Contractors, who are not covered by the CIP, need to provide evidence of insurance for those same policies but must cover both on and off-site coverage. Here is a list of coverages that are most commonly required by entities not enrolled in a CIP.
- General liability: If you are working with contractors or subcontractors who are not eligible or opt out of a CIP, general liability coverage will be required. Just make sure to confirm that no exclusions exist that preclude coverage in the event of a claim on your project.
- Workers’ compensation/employer liability: This also goes for workers’ compensation and employer liability coverage. This is required on all construction construction agreements, specifying statutory obligations that are covered under the compensation laws of the state as well as employer’s liability (EL) coverage to the employer for work-related bodily injury or disease aside from the liability already imposed on the employers by state law. ,
- Professional, pollution, and riggers liability for specific trade types: Any contractors or subcontractors working on the project that aren’t explicitly included in the CIP will need these insurance coverages if their trade involves professional services (such as consulting, surveying, or design/build services), pollution liability for trades with potential environmental exposures and riggers liability for trades moving extremely large or heavy objects, with heavy equipment,
Want to check if you’re covered?
Tracking certificates of insurance can be confusing and messy, especially if you’re working with dozens or hundreds of insurance certificates required during an OCIP or CCIP. No matter how familiar you are with the process, CIPs can be convoluted. The team of insurance tracking experts at myCOI can help you determine whether or not your entity is covered under your current CIP coverage. Talk with a specialist today!