Safety and Training Services

OCIP Wrap Policies

25/03/11 19:12

Don’t Be Divided and Conquered!



OCIP:

SafetyConsultingWest.com has effectively served OCIP projects for many years.

Many contractors and developers are now using OCIP, or more commonly called WRAP insurance policies
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(Owner Controlled Insurance Programs) to cover General Liability (GL) and Completed Operations exposures and frequently Workers Compensation coverage as well. In this type of policy most or all contractors and sub contractors are enrolled in one policy that covers a single (or multiple specified) project(s). The policy provides GL coverage during construction and completed operations coverage throughout the statute of limitations (10 years in many states). OCIPs are one effective tool in defending against class action lawsuits and latent defect claims.
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In residential construction most OCIPs are General Liability and Completed Operations coverage only. Many industrial and public works projects are covered by OCIPs that provide GL as well as Worker’s Compensation coverage.

One of the OCIP’s strengths comes through covering the developer, general contractor and practically all subcontractors under one policy. In the event of a claim this strategy allows the insured parties and the one insurance company to focus their efforts and act as a team instead of counter suing each other as is common when each contractor is working under their own general liability policy.

The team is able to determine which parties are part of any alleged problem allowing them to work together with the developer and general contractor to either repair issues or to stand together against lawsuits.

The rest of the insured parities (trade contractors) have no or very limited cost and responsibility because their work was not part of the alleged
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problem. This is a huge improvement over standard GL policies where twenty or more insurance companies collect deductibles from each of their individually insured subs (sometimes 40 or more subs) and then each insurance company either settles the claim and/or counter sues the other subs, the general contractor and the developer. Under the old strategy contractors are "divided" and so are "conquered."

While the wrap policy has many strengths some of the benefits can be limited or lost altogether if proper procedures are not followed. Many of the strengths that OCIPs offer require that good management and loss control strategies be implemented early in the process. The value of a good Loss Control Professional who is familiar with these strategies can be invaluable. SafetyConsultingWest has been effectively providing these specific services for many years. Please contact us and let us help you.

Large Industrial Constrtuction