BCS health insurance covers on-site incidents, while off-site insurance covers project-related incidents that occur elsewhere.
Construction is a high-risk, financially insecure industry that relies heavily on contractors, making certificate of insurance (COI) tracking particularly important. Depending on the project alone, third-party contractors may not be in charge of enforcing their own policies.
Owner-controlled insurance programs (OCIPs) and contractor-controlled insurance programs (CCIPs) are types of consolidated or controlled insurance programs (CIPs). Also known as closures, these comprehensive insurance plans often cover more than one party and combine a variety of policies such as general liability, workers’ compensation, and builder’s risk. Often in large-scale construction projects, they are taken to cover all contractors working on the job under one policy.
OCIPS and CCIPs have several potential benefits. Who knows, the most important are powerful risk management tools. With careful consideration and the help of an expert insurance broker, you can provide broad and uniform coverage across your risks with project-appropriate limits. This type of policy also eliminates the need for your contractors to carry an individual policy, allowing you to hire anyone you want regardless of insurance coverage, reducing the need to watch COI.
While OCIPs and CCIPs are extremely useful, they have a significant potential drawback: off-site coverage.
On-Site and Off-Site Coverage
As the sponsor has less control over safety procedures away from the workplace, assignments occurring elsewhere may be considered higher risk for insurance. Because of this, many OCIPs and CCIPs only offer onsite coverage. This means that the event must occur at the designated construction site in order to be covered. If you store or prepare materials off-site, it is unlikely that your OCIP or CCIP will cover a claim that occurs at that location, even if it is directly related to the project at hand.
Example: A contractor producing custom mahogany woodwork in an offsite workshop leaves a faulty heater overnight. A fire breaks out and thousands of dollars’ worth of finished work and raw materials are destroyed. Many OCIPs and CCIPs will not cover this, as the incident occurred off-site.
While the lack of offsite coverage is a downside to OCIPS and CCIPs, it doesn’t have to be a dealbreaker. Sponsors of projects with offsite components need only be aware of these risks so they can fill in coverage gaps by relying on subcontractors’ insurance policies or by discussing other options with an insurance broker.
One possible solution is purchasing policies with off-site coverage, regardless of your OCIP or CCIP. It can only be expensive if you want greater coverage, as you may have to purchase separate components of an OCIP or CCIP, such as workers’ compensation and general liability.
Depending on the nature of your operations and the comprehensiveness of your OCIP or CCIP, additional necessary policies may additionally include:
- Pollution Liability
- Professional liability
- Riggers Liability
The best way to determine the ideal coverage for your project is to consult with a qualified insurance broker. They can help you assess your risks and find the right action plan to manage potential risks.