OCIPs: How Coverages Compare to Traditionally Provided Contractor Coverage

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Edward Shelton
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1 OCIPs: How s Compare to Traditionally Provided Contractor 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 1

2 Introductions John Didion Executive Director CIPA Michael Bishop ASCIP OCIP Consultant Marco Guardi AVP Risk Control Arthur J Gallagher 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 2

3 Purpose Overview of typical coverages needed for construction projects Discuss OCIP coverages compared to Contractor provided coverage Demystify construction insurance 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 3

4 General Differences Policy owner vs. additionally insured Policy Singularity Application of limits Control of claims 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 4

5 General Liability What it Covers Injuries to non-district affiliated personnel and property damage Unique Issues Over action claims Completed operations Risk Transfer (SB 474) gaps (Excess GL) 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 5

6 General Liability OCIP 10 year Completed Operations Excess Liability $2M per Occurrence $4M Aggregate Project dedicated limits $15M Contractor Provided 2-3 year Completed Operations Excess Liability Possible gaps Exclusions? $2M per Occurrence $4M Aggregate Shared limits with other projects $? 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 6

7 Workers Comp What it Covers Injuries to construction personal Unique Issues Employers Liability Over action claims 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 7

8 Workers Comp OCIP Medical costs, indemnity and expenses Statutory Contractor Provided Medical costs, indemnity and expenses Typically statutory 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 8

9 Builders Risk What it Covers Protects the interest of all involved parties including the District, all contractors and subcontractors. Protects property intended to become a permanent part of the project. Issues Non standard form Subrogation 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 9

10 Builders Risk OCIP Contractor Provided Extension of ASCIP s Property program Property Existing building In transit Temporarily at other locations Expenses Demolition/Debris removal Engineer/Architect Rental interruption and income Extra expense Expediting expense $50M?? Bid and contract dependent Property Insurable work Project scope Expenses Demolition/Debris removal Engineer/Architect Value of construction 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 10

11 Contractors Pollution Liability What it Covers Fills gaps normally excluded by general liability policies Provides coverage for bodily injury, property damage, defense costs, cleanup, and restoration expenses arising from the insured operations of the contractor Issues 20% of contractors purchase Non standard form 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 11

12 Contractors Pollution Liability OCIP Third party liability $5M Environmental Crisis Management $250K Contractor Provided Third party liability?? Bid and contract dependent?? 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 12

13 Other s OPPI Owners Protective Professional Indemnity Protects for faulty design liability $150K (higher limits available) Breach of Contract Defense costs $25K 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 13

14 Conclusion Demystifying the Complicated Construction insurance is complicated OCIPs as sound risk management tools Questions? Next webinar 4/26 OCIPs: What Services to Expect from OCIPs compared to Contractor Provided Insurance 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 14

Primer for Managing Airport Construction Risk

Primer for Managing Airport Construction Risk ACI Conference Nashville January 15, 2016 Agenda Contract Issues Project Insurance Considerations Controlled Insurance Programs (CIPs) Project Specific GL/Excess