If you are a property developer, or you are managing a large construction project, you have a choice about the sort of insurance you get to cover your project.
Broadly speaking, it is a choice between an owner-controlled insurance programme (OCIP) and a contractor-controlled insurance programme (CCIP).
In this post we will explain the difference between the two arrangements, to help you decide which is best for you.
What is OCIP?
OCIP stands for owner-controlled insurance programme. It is designed to provide comprehensive cover for key parties involved for the duration of a construction project. As the name of the programme suggests, an OCIP is usually purchased by the owner of the construction project, such as a property developer.
What is CCIP?
CCIP stands for contractor-controlled insurance programme (CCIP). This is designed to provide cover for all contractors and subcontractors involved in construction projects. A CCIP is typically purchased by a contractor, which means that the owner may not pay the premiums themselves.
What is the Difference Between OCIP and CCIP?
The biggest difference between an OCIP and a CCIP is the level of cover provided by each arrangement. OCIPs provide comprehensive cover while CCIPs are not as comprehensive.
Usually, OCIPs provide comprehensive cover for all aspects of a construction project, including property damage, personal injury, and certain liabilities. OCIP coverage can extend to contractors and subcontractors, along with their employees, and it can even cover third-party claims.
CCIPs, on the other hand, are not as comprehensive. They are usually purchased directly by contractors, and as such will only cover that contractor, along with any subcontractors they appoint.
Plus, CCIPs are often a lot more limited in scope. While an OCIP can cover an entire construction project, from start to finish, CCIPs are usually purchased on a project-by-project basis. This means that the coverage may stop as soon as the contractor’s involvement in the project comes to an end.
OCIP vs CCIP: Which Should I Choose?
There are certainly some benefits to choosing a CCIP. This arrangement can be a lot more affordable than purchasing an OCIP. Plus, letting contractors arrange their own insurance can help streamline construction projects.
Yet if you are overseeing a construction project, only an OCIP will guarantee you the cover you need, for as long as you need it.
With an OCIP, the property developer will have full control over the entire policy, and all of the associated costs. This means:
- You get to choose the extent of your cover, so you can ensure that everyone involved in the project is covered for every risk. With a CCIP, the contractor may overlook certain risks, which may lead to a costly underinsurance situation.
- The entire project, from start to finish, can be covered under a single policy. This is often the most cost-effective approach. If there are multiple contractors involved in the project, there may be multiple CCIPs. This could result in overlaps across the various premiums, meaning you may pay extra for cover you do not need.
- An OCIP can also streamline the claims process. Rather than potentially making multiple claims on multiple policies, you will only have to make a single claim on a single policy. Plus, all settlements will be made directly to your business.
Be sure to read our full guide to your insurance requirements as a property developer.
Specialist Insurance Services for Property Developers
If you are worried about your insurance requirements as a property developer, we are here to help.
We are an independent Lloyd’s broker with a dedicated team of experienced insurance professionals. At James Hallam, we know that no two property development projects are ever quite the same. This is why we will take the time to understand your risks so we can tailor a flexible and cost-effective property developer insurance package that offers all the cover you need.
We can help you ensure you have enough cover to protect your project, at a competitive price. Get in touch for a free quote today.