An owner-controlled insurance program is a type of wrap-up insurance purchased by the project owner that provides general liability, workers compensation, and often excess liability coverage for all contractors and subcontractors on a project. The owner negotiates a single master policy that covers everyone working on the site, eliminating the need for each contractor to provide their own project-specific coverage. OCIPs are most common on large projects with construction values exceeding $50 million, though they are increasingly used on smaller projects.
When you are enrolled in an OCIP as a roofing subcontractor, you must remove insurance costs from your bid because the owner is providing coverage. This is called an "insurance credit" or "insurance deduct," and it typically ranges from 3% to 8% of your contract value depending on your trade and the specific coverage provided by the OCIP. The OCIP administrator will provide enrollment forms, safety requirements, and reporting obligations that you must comply with throughout the project.
Working on an OCIP project creates several practical obligations for roofing contractors. You must maintain your own insurance for operations outside the OCIP project. You must properly exclude OCIP project payroll from your own workers comp policy to avoid paying double premiums. You must comply with the OCIP's safety program, reporting requirements, and claims procedures, which may differ from your own carrier's processes. And you must verify that the OCIP provides completed operations coverage for a reasonable tail period, because if it does not, you may need your own policy to cover post-completion claims from the OCIP project.