Owners and contractors protective (OCP) liability insurance

Owners and contractors protective (OCP) insurance is a special kind of liability coverage that an independent contractor purchases on behalf of another party—typically the project owner or general contractor. It’s designed to protect the owner or general contractor from costs related to incidents caused by the contractor. As a type of project insurance, OCP policies are mostly written for the construction industry.

While it might seem like OCP could be a substitute for a CGL policy, this is not the case. OCP insurance is very narrow, and if owners or general contractors rely on it alone, they may quickly see that they’re left quite exposed due to insurance coverage gaps.

Additionally, since OCP policies only benefit the named insured, contractors would need to purchase CGL insurance to protect themselves. For instance, if you accidentally start a fire while working on a project and cause damage to a client's property and are sued, you would need a general liability policy to cover that claim. But taking out OCP insurance would protect the project owner who hired you if they were sued because they didn’t tell you where the fire extinguisher was. Really, OCP insurance should not replace general liability insurance, it should supplement it.

As a contractor, you should also give extra consideration to special types of insurance that apply to your field. For example, you may want to purchase equipment floater insurance to cover tools and equipment you use, in case they are stolen or damaged. An Insureon agent can help you figure out all the coverage you need while still keeping your costs low.

OCP insurance is purchased by a contractor, either a general contractor or a subcontractor. They would pay the premium. However, the coverage extends to the named insured. That would be whoever hired them. A subcontractor could list the project owner or the general contractor as the named insured. A general contractor would list the project owner as the named insured.

Although you might see OCP insurance as an extra cost, there is one benefit to keep in mind. Because it’s a standalone policy, any loss that it covers would not affect your general liability policy premium. Often when you submit a CGL claim—for yourself or an additional insured—you’ll see your rates go up during your next renewal.

Like OCP, an owner-controlled insurance program (OCIP) is used to address liability on a construction project. But it is much more extensive, and the person who purchases it differs.

While OCP insurance is bought by an individual contractor for the benefit of the project owner, an OCIP is purchased by the project owner for the benefit of everyone involved in the project. So it would cover the general contractor and all subcontractors, as well as the owner.

An OCIP is a type of wrap-up insurance. They’re called that because it combines (or wraps up) different insurance policies into one package. Some of the standard forms of insurance that are merged into an OCIP are commercial general liability, workers’ compensation, excess liability, and employer’s liability. But they could also include builder’s risk insurance, completed operations coverage, or many other types of protection.

The other kind of wrap-up insurance is a contractor-controlled insurance program, or CCIP. General contractors purchase those types of policies, but the principles are basically the same.

Obtaining owners and contractors protective liability insurance is simple with Insureon. You can start a quote with our easy online application to compare rates from several top-ranking U.S. providers. Plus, one of our expert agents will be there for any help you need. Coverage can typically start within 24 hours of applying. At that point, you can log onto our customer portal to view your documents and even print out a certificate of insurance.