Wrapping Up the OCIP
By David L. Grenier
C-Risk, Inc.
February, 2001
This article is part of a series discussing Owner-Controlled Insurance Programs (OCIPs).
Wrapping Up the OCIP
As we noted at the outset of this series, OCIPs are an increasingly popular insurance procurement option, typically used on very large singlesite construction projects with many contractors and subs, and total construction values in excess of $100 million. They can also be used effectively with portfolios of smaller projects that aggregate to at least $50 million annually.
Note: Over the last several years, many states have lowered the minimum threshold for the use of wrapups. Consult your state insurance laws for specifics. An OCIP can provide owners with some definite advantages over a traditional insurance program:
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Substantial savings potential
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Broader insurance coverage
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Higher policy limits
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More efficient claims management
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Better safety and loss controlprocedures.
In addition, OCIPs offer many of these same benefits to contractors and subs who choose to participate on the project.
However, an OCIP may not always be the best choice for a risk management program on all projects. That’s why owners contemplating this type of program for an upcoming project should initiate a formal assessment process, including a feasibility study.
After the feasibility has been determined, owners should structure the OCIP carefully, with the help of a competent risk management professional. Because, like everything else in the construction industry, careful planning and administration are key components of any successful OCIP. Good luck!
About the Author: David L. Grenieris President of C-Risk, Inc., a national risk management consulting firm providing risk management strategies and solutions to construction-industry clients. He specializes in construction, contract management, and wrap-up insurance programs.
Copyright © 2001-2006 David Grenier. All rights reserved. No portion of this article may be reproduced without the express written permission of the copyright holder, except as follows: You may link this article to your website, either directly or through an ExpertLaw Library index page, provided your link does not depict this article, its author, or expertlaw.com in a negative manner.