How to take advantage of the cost, coverage and control benefits that an OCIP provides.
It is increasingly common for the larger developers and owners in the UK to use owner-controlled insurance programmes (OCIPs), but developers and owners of all sizes may not be aware that they too can look to take advantage of the cost, coverage and control benefits that an OCIP provides.
Construction projects are typically insured through either a contractor-controlled insurance programme (CCIP) – in which contractors are responsible for the insurance arrangements – or an OCIP, which is a centrally controlled programme of insurances arranged on behalf of all project parties that are involved in the project.
“Construction and redevelopment projects are often highly complex, and interface with a multitude of different risks that are often overlooked. OCIPs are common on the larger spectrum of developments, however; they are becoming an increasingly common method of arranging insurance programmes throughout all sizes of projects,” says Will Bromfield, Associate in JLT Specialty’s Construction Division.
“By developers and owners arranging insurance programmes for projects, they control the insurances in place; they are able to ensure compliance with funding requirements and construction contracts.
Our clients maintain complete authority over the covers placed and the premium costs that apply.
“They are becoming increasingly risk conscious and, with the demise of contractors not far away from the headlines, we advise that developers and owners build relationships with insurers and assume the responsibility for arranging tailored policies. These also include coverages only available to the employer and are fit for purpose for their unique project requirements.
“Historically, CCIPs have been a more cost– effective method of obtaining project insurances; however, the price differential has significantly reduced over recent years. By arranging their own insurances, our clients have the confidence that the relevant insurances are in place – there are no uninsured contracts and the coverage is tailored to their risk management philosophy with a selection of insurers, loss adjusters and the control of claims.
“OCIPs are not for every developer or owner; they require additional administration from our clients. However, we are on hand to provide guidance, direction and advice to all of our clients. As the sophistication of our clients’ risk management and risk appetite continues to improve, we anticipate greater use of OCIPs.”
For further information please contact Will Bromfield, Associate on +44 20 7558 3131 or email firstname.lastname@example.org