Minimizing Design and Construction Risk with OCIP and CCIPAssociation of Construction and Development
July 9, 2013 — 1,846 views
Any construction project that is contracted by a firm requires insurance. Insurance is one of the pillars of property contracting deals simply because of the high risk involved in the field. The risk to profit ratio is huge. Consequently, the dynamics involved in the choice of insurance are also varied and specialized. You can optimally minimize design and construction risks in a contracting project by choosing the right format of insurance. The basic modules of insurance that are highly specialized to cater to each party's specific need are the ones mentioned below.
The Owner Controlled Insurance Program
Insurance policy purchased by the owner of the property during its renovation or construction is called an Owner Controlled Insurance Program. This program covers any loss, damage, or liability resulting from the project. The usual limitations like an Act of God obviously apply. Typically, the insurance package covers workers compensation policy, commercial general liability policy, and employers’ liability clauses. These policies are also commonly called as “Wrap-ups” in the industry.
The identifying feature of an owner controlled insurance program is that all the possible insurances are purchased by the owner of the property as a single policy from one insurer. These include all hazard, construction, terrorist, workers' compensation, materials, and building related insurance. This is an advantage to property owners as all costs are unified into a single policy from a single source.
Controller Controlled Insurance Program
A certain type of insurance or wrap-up policy wherein all the people involved in building of a project are covered by one insurance policy. The project's general contractor is usually the policy sponsor. The central idea that this program functions on is simple, it is targeting collective safety. The vested interests of the owner of the project and the contractors, sub-contractors and workers who are working on the project at that time are protected.
The Rolling Owner Controlled Insurance Program
The rolling owner controlled insurance program takes care of providing workers' compensation, high liability, and general liability insurance for every contractor who is working in any designated construction project. The program has many benefits that are unique to it. Some benefits include reduced insurance premiums, which is due to purchasing in bulk, flexibility of insurance, advanced safety and loss, and cost savings.
Rolling Contractor Controlled Insurance Program
The rolling contractor controlled insurance program is an insurance that allows a project to be more competitive and profitable. Rolling insurance programs are very useful to have a little more flexibility while negotiating with the policy. This policy basically covers multiple on-going projects, and this is what differentiates it from the other policies. Projects are rolled in and out of the program as and when they begin or finish.
Depending on project specificity, the contractors or property owners can opt for different insurance policies to cover the project. A controlled policy program allows for general safety of the project and is good for singular and particular projects; a rolling policy program is apt for multiple project coverage. Either way, insuring your project is an absolute must when dealing with a project with relatively high stakes. Choosing the best possible insurance program will help you keep your project safer and minimize your risks.