Laying the Groundwork for an OCIP
This article is part of a series discussing Owner-Controlled Insurance Programs (OCIPs).
The Necessary Groundwork
Owners who are considering implementing an OCIP on an upcoming project should proceed through the following steps prior to implementation:
Conduct a Feasibility Study. This critical first step evaluates the advantages and disadvantages, statutory and regulatory impediments, cost savings, timing, and other key issues.
Issue the Request for Proposal (RFP). Assuming an OCIP is feasible, proposals should be obtained from brokers and/or OCIP administrators. In many cases, the broker is the OCIP administrator; however, an owner’s representative or risk management consultant may also be considered.
The RFP should describe the scope of the construction project, anticipated coverages, and requested services, and should be used to obtain information from the respondents about their:
- OCIP administrative services
- Experience and location of the project team
- Approach to structuring insurance programs
- Available safety and loss control services
- Available claims management services
- Computerized risk management information systems (RMIS)
- Fees for all other required service components
Initiate the Interview Process. Firms that submit the best proposals should be interviewed (or “invited to the beauty contest,” as they say in the business). This gives the owner an opportunity to compare and contrast different firms so that the one offering the best OCIP structure, services, innovative approaches, and fees for that particular project can be selected. Note: Services and fees can vary widely between firms, so evaluate fees carefully. Request sample service contracts, and negotiate changes to meet your specific requirements.
Work Together for Insurance Placement. The selected firm should work with the owner and the GC (if selected at this time) to compile underwriting information and negotiate insurance terms.
Prepare All Documentation. This includes creating the OCIP administration manual, drafting the bid document clauses, and producing enrollment forms and similar administrative materials.
Next: Implementing an OCIP
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. If you believe you may lawfully use a quotation, excerpt or paraphrase of this article under the Fair Use exception to copyright law, except as otherwise authorized by the author of the article, you must cite this article as a source for your work and include a link back to the original article from any online materials that incorporate or are derived from the content of this article.