OCIP vs. CCIP: What’s the Difference?

OCIPs and CCIPs both function similarly and act as insurance for construction projects. The central difference is who is actually paying for the insurance, and there is no best answer that's applicable to all projects. Take a closer look at the most important differences between OCIPs (Owner Controlled Insurance Programs) and CCIPs (Contractor Controlled Insurance Programs) to understand how these types of insurance may apply to your business or project.

OCIP and CCIP Basics

• OCIP: An OCIP is a type of insurance policy on a construction project that is held by the property owner. For example, a construction project to renovate an office building that is covered by OCIP would have its insurance policy held by whoever owns that office building. While each policy may be different, they generally offer coverage for commercial general liability, excess liability insurance, workers' compensation, and employer's liability.
• CCIP: Also known as wrap-up insurance, CCIP is a type of insurance policy controlled by contractors, and it's designed to protect contractors, subcontractors, and the project owner from workers' comp and general claims from third parties. CCIPs identify property owners as additional insured, but the policy itself is controlled by the contractors — not the property owners.

Benefits of OCIP

Since an OCIP is controlled by a property owner, it is primarily beneficial in situations where the property owner has multiple construction projects going on at once. Instead of having to deal with multiple contractors and subcontractors, insurance costs are all carried out through a singular policy premium by a single broker and insurer. Plus, large project insurance can focus on safety and loss prevention thanks to the consolidated costs.

Benefits of CCIP

The primary benefit of CCIP policies is that they are generally more cost-effective than traditional insurance. The array of benefits it offers to stakeholders is also typically more varied compared to typical insurance, so contractors can enjoy factors like a streamlined claims process, reduced coverage gaps, and improved site safety practices.

Finding the Right Solution

To determine whether you should opt for OCIP or CCIP, you should consider the nature of your project. With OCIP policies, you will need to provide a small upfront workload to get started, and you may be subject to additional board approvals. Meanwhile, CCIP coverage is designed to cover the contractor before the public entity. Additionally, any other contractor brought in by the project owner that is not under the general contractor's contract chain will have to be covered separately.

The Davis Bacon Act

In accordance with the Davis Bacon Act, any construction project owned by the state or federal government must follow a specific wage chart and provide a certified payroll. OCIP and CCIP coverage can both facilitate compliance with this standard, but one of the best ways to maintain compliance is to work with a professional employer organization or PEO.

SPLI PEO Compliance and Insurance

SPLI is a professional employer organization that offers workers' compensation coverage, certified payroll services, remote paycheck services, and payroll administration to help businesses in the construction industry and beyond. Our support allows you to focus on what your business does best. Get in touch with our team today by calling 1-866-726-0999 or by filling out our online contact form to request a quote.