Introduction The Massachusetts Port Authority (Massport) has elected to provide and administer an Owner Controlled Insurance Program (OCIP) for the Logan Airport Construction Projects. This manual will provide you with details about the Wrap-Up Program. This manual is not intended to be a substitute for or to modify the terms of any provisions of the insurance policies, and in case of any questions or inconsistencies, the language of the insurance policies shall take precedence and govern the meaning and scope of the coverage provided. SHARED/SERVICE/MASSPORT/OCIP INS. MANUAL 1
DIRECTORY OF PERSONNEL Project Insurance Broker Hilb Rogal & Hobbs 99 High Street, 28 th Floor Boston, MA 02110-2360 OCIP Administration Virginia M. Troisi Telephone No.: (617) 348-1904 Facsimile No.: (617) 348-1990 Anthony Ierardi Telephone No.: (617) 348-1936 Facsimile No.: (617) 348-1990 SHARED/SERVICE/MASSPORT/OCIP INS. MANUAL 2
INSURANCE COMPANIES Workers Compensation ACE USA 6600 Campus Circle Drive East, #300 Irving, TX 75063 PO Box 152039 Irving, TX 75015-2039 Airport Contractor s Liability London Aviation Market Refer to Project Insurance Broker: Hilb Rogal & Hobbs 99 High Street, 28 th Floor Boston, MA 02110-2360 Contractors Pollution Legal Liability American International Specialty Lines Insurance Company AIG 99 High Street Boston, MA 02110 SHARED/SERVICE/MASSPORT/OCIP INS. MANUAL 3
DEFINITIONS Approved Program Participants: Terminal Area Program Coordinator, Construction Manager and their Subconsultants, Prime Contractor, Contractor or Subcontractor of any tier who perform operations at the Logan Modernization or Capital Program Project Site in connection with the work and who have been approved by the Owner for participation in the OCIP. Insured shall mean the Owner, Terminal Area Program Coordinator, Construction Manager and their Subconsultants, Prime Contractor, Contractors, Subcontractors of any tier and their employees who have been approved by the Owner for Participation in the OCIP. OCIP will provide coverage only to employees performing work at or form a designated Project site. Any Insureds employees performing work for the Project but not on the Project Site are not covered. Construction Managers, their Subconsultants, Contractors and Subcontractors should obtain their own non-project related insurance for those employees and operations not covered. The Authority reserves its right to exclude anyone from participation in the OCIP. The Contractor or its Subcontractors of any tier performing lead and/or asbestos abatement work shall be required to provide their own insurance as outlined herein, and shall not be covered by insurance purchased by the Authority through the OCIP, except in part. Vendors, suppliers, materialmen, owner/operators and firms whose sole function is to transport materials, supplies, tools equipment, parts or other items to or from project worksite shall not be covered by insurance purchased by the Authority through the OCIP, and shall purchase and maintain insurance as required for Subcontractor (of any tier) under Section 8.3 hereof and under Division I, Article 46. It shall be the sole responsibility of the Contractor to ensure that all eligible Subcontractors of any tier are properly enrolled in the OCIP, and that all such Subcontractors carry and maintain the required insurance coverages as set forth in Section 8.3 herein, prior to commencement of the work. Full and proper enrollment in the OCIP and evidence that all insurance coverages required under this Article 8 are in full force and effect (in form and substance satisfactory to the Authority) shall be required of the Contractor and its Subcontractors of any tier and submitted to the Authority prior to the Authority s issuance of security badges for this project (see Division I, Article 87) and/or prior to the entrance of the Contractor or any of its Subcontractors of any tier onto or into the project worksite, and otherwise prior to the commencement of any work under this Contract by the Contractor or any of its Subcontractors of any tier. The OCIP terms, and conditions, limits and deductibles are subject to change during the Contract term. Suitable notification of such changes shall be provided. This coverage description is not intended to be a substitute for or modification of the terms of any provisions of the OCIP insurance policies. In the case of any question or inconsistency the language of the insurance policies shall take precedence and govern the meaning and scope of the coverage provided. SHARED/SERVICE/MASSPORT/OCIP INS. MANUAL 4
Insurance Companies OCIP Owner Project Workers Compensation: ACE USA Airport Contractors Liability Insurance: Lloyds and British Companies Contractors Pollution Legal Liability: American International Specialty Lines Insurance Company (AIG) Owner Controlled Insurance Program The Massachusetts Port Authority (Massport) Logan Modernization Construction Project and Capital Programs Project Insurance Broker Project Site Hilb Rogal & Hobbs (HRH) 99 High Street, 28 th Floor Boston, MA 02110-2320 Designated Logan Modernization worksites and Designated Capital Programs worksites which means the property owned or controlled by Massport that is located within the Logan International Airport, Logan Modernization and Capital Programs project boundaries and other agreed upon dedicated sites. Terminal Area Program Coordinator O Brien-Kreitzberg & Associates Logan Office Center One Harborside Drive, Suite 317N East Boston, MA 02128 SHARED/SERVICE/MASSPORT/OCIP INS. MANUAL 5
A. INSURANCE INCLUDED IN OCIP The Owner has secured specific coverage for itself, the Terminal Area Program Coordinator, Construction Managers, their Subconsultants and Approved Program Participants performing work at the Project Site. The insurance does not apply to vendors, suppliers, material dealers, or others who merely transport, pick up, deliver or carry materials to or from the Project Site. The insurance arranged by the Owner provides coverage and limits that meet or exceed those required of you in absence of the OCIP. The coverages afforded under the OCIP do not include all the insurance needed by Construction Managers, their Subconsultants, Contractors or Subcontractors. For example, Workers Compensation and General Liability coverages apply only to the operations of and for each Insured at or emanating directly from the Project Site. The insurance does not apply to the operations of any Approved Program Participant in its regularly established main or branch office, factor, warehouse, or similar place of business. Also asbestos abatement and lead paint abatement contractors are not covered by the Workers Compensation component of this OCIP. It is recommended that all Approved Program Participants have their insurance agent review the coverage provided under the OCIP. It is the responsibility of the Approved Program Participants to maintain, at their sole option and cost, any additional insurance they deem necessary. While the Owner will endeavor to maintain the OCIP in its present form, or better, no warranty or representation is made that market conditions, cost, loss record or other factors not now prevalent will not result in changes to the OCIP at some future date. Notwithstanding any other provisions of the Contract Documents, the Owner may, at its sole option, modify or discontinue the OCIP or any part thereof. Any such modification or discontinuance shall be subject to the Change Order provisions of your contract. The Approved Program Participant shall not attempt to cancel any of the policies described herein without the express written consent of the Owner and any attempted cancellation without express written consent will be null and void. Only the following insurance coverages are provided by the Owner under the Wrap-up Program: 1. Workers Compensation Statutory Workers Compensation insurance in accordance with the laws of the Commonwealth of Massachusetts or any other applicable jurisdiction. Employers Liability $1,000,000 Bodily Injury by Accident, Each Employee $1,000,000 Bodily Injury by Disease, Each Employee $1,000,000 Bodily Injury by Disease, Policy Limit SHARED/SERVICE/MASSPORT/OCIP INS. MANUAL 6
Insurance Included in OCIP (Continued) Other Coverage Extensions: United States Longshoremen & Harborworkers Act Endorsement Maritime Coverage All work subject to the Jones Act $1,000,000 each accident/aggregate In REM Endorsement 2. Airport Contractors Liability This OCIP coverage is written and provides coverage with a combined single limit for Bodily Injury and Property Damage at Logan Airport only. Limits of Liability: $300,000,000 Each accident and in the Annual Aggregate with respect to Products/Completed Operations. $ 25,000,000 Any one offense and in the Aggregate for Personal Injury Liability. Contractor Deductibles: The General Contractor and Subcontractor are responsible for $50,000 of each and every bodily injury/property damage incident for which it is responsible and/or has caused to occur. In the event of bankruptcy or any circumstance preventing the Subcontractor from fulfilling its contractual obligation to pay third party deductible, the Contractor shall assume and fulfill such payment obligation. SHARED/SERVICE/MASSPORT/OCIP INS. MANUAL 7
Insurance Included in OCIP (Continued) 3. Contractor s Pollution Legal Liability The Authority has purchased a Contractor s Pollution Legal Liability policy, as described below. It is the intent of this policy to provide catastrophic coverage for pollution incidents. This policy shall pay, on behalf of the Authority, the Contractor and its Subcontractors of any tier for any losses which they become legally obligated to pay as a result of claims for Bodily Injury or Property Damage from Pollution Conditions arising out of the scope of work at the project worksite. Limits of Liability: $5,000,000 each loss $5,000,000 aggregate Deductible: $50,000 each loss Each Insured under this policy will be responsible to satisfy the deductible in the event they are held liable for a loss. Coverage is written on a claims made basis, and includes the following notable coverage extensions: The Authority is a Named Insured Contractor and its Subcontractors of all tiers are covered as Additional Named Insureds Clean up costs for a covered incident On site transportation risk is included Insured vs. Insured wording Defense cost included in limit of liability Notable Policy Exclusions include: Clean up costs for known pollution hazards Claims arising out of asbestos abatement SHARED/SERVICE/MASSPORT/OCIP INS. MANUAL 8
Cancellation of Insurance Provided by Massport Under The OCIP If any elements of the Massport OCIP are canceled the Construction Managers, their Subconsultants and Contractors of every tier shall be responsible for procuring such insurance with limits and coverage conditions required by Massport. Massport shall provide at least thirty (30) days notice of such cancellation. SHARED/SERVICE/MASSPORT/OCIP INS. MANUAL 9
B. CONTRACTOR COVERAGES REQUIRED Prior to commencement of any work and until completion of its work under a contract, each Approved Program Participant shall maintain the following insurance coverage, at its cost, from insurers acceptable to Owner, providing evidence of such coverage to the Project Insurance Broker prior to staring work at the Project site. 1. Comprehensive Automobile Liability Insurance The OCIP does not cover Contractor s or its Subcontractor s (of any tier) motor vehicles used in the performance of the work, whether kept, used, or operated on or off the project worksite. For projects that involve Airside work, the Contractor and each of its Subcontractors (of any tier) shall purchase and maintain, at their own expense, with an insurer acceptable to the Authority, Comprehensive Automobile Liability Insurance for not less than a combined single limit of $10,000,000 each accident for Bodily Injury and property Damage. However, a Subcontractor (of any tier) performing Airside work who does not intend or is not required to keep, operate or use a vehicle on or at the project worksite shall instead be required to purchase and maintain, at its own expense, with an insurer acceptable to the Authority, Comprehensive Automobile Liability Insurance for not less than a combined single limit of $2,000,000 each accident for Bodily Injury and Property Damage. No access will be allowed Airside without the $10,000,000 limit. For projects that involve Non-Airside work, the Contractor and each of its Subcontractors (of any tier) shall purchase and maintain, at their own expense, with an insurer acceptable to the Authority, Comprehensive Automobile Liability Insurance for not less than a combined single limit of $2,000,000 each accident for Bodily Injury and Property Damage. All Automobile Liability Insurance Coverage, for Airside and Non-Airside work, shall include Non- Owned and Hired Car coverage. The required Automobile Liability limits may be satisfied by a combination of a primary policy and an excess or umbrella policy. The Construction Manager and its Subconsultants and the Contractors and their Subcontractors shall comply with the requirements of the Workers Compensation Act of the Commonwealth of Massachusetts and shall provide Workers Compensation Insurance including Employers Liability with a minimum limit of $1,000,000 covering all off-site work. Massport will not execute the Contract until acceptable evidence of insurance is received by the Project Insurance Broker. SHARED/SERVICE/MASSPORT/OCIP INS. MANUAL 10
Contractor Coverages Required (Continued) 2. Workers Compensation Insurance for Lead And/or Asbestos Abatement Contractors The OCIP does not cover Workers Compensation claims arising from lead and/or asbestos abatement activities. The Contractor and its Subcontractors of every tier performing lead and/or asbestos abatement work shall comply with the requirements of the Workers Compensation Act of the Commonwealth of Massachusetts and shall provide Workers Compensation Insurance including Employer s Liability, with a minimum limit of $1,000,000 covering all work on or at the project worksite and all off-site work. 3. Commercial General Liability Insurance For Work Performed Outside Of Logan Airport The OCIP Commercial General Liability policy does not insure the Construction Manger and its Subconsultants or the Contractors or Subcontractors for any liability for Bodily Injury or Property Damage which results from any work which is performed outside the confines of Logan Airport. The Construction Managers and their Subconsultants and Contractors and Subcontractors shall purchase and maintain, at their own expense, Commercial General Liability Insurance, covering all work outside the confines of Logan Airport. Coverage must be on an occurrence basis and must pay on behalf of the Construction Manager and their Subconsultants and Contractors and Subcontractors all sums which they shall become legally obligated to pay for damage because of Bodily Injury or Property Damage caused by an occurrence during the policy period. Coverage shall be written with no less than a combined single limit of $5,000,000. This coverage must include Explosion, Collapse, Underground Property Damage, Products and Completed Operations, Blanket Contractual and Contractors Protective Liability. Massport will not execute the Contract until acceptable evidence of insurance is received by the Project Insurance Broker. 4. Tools and Equipment Floater Policy (Not Required But Recommended) The Construction Managers and their Subconsultants, the Contractors and Subcontractors are responsible for their own construction tools and equipment whether owned, leased, rented, borrowed or used at the worksite. Massport shall not be responsible for any loss or damage to Contractors equipment. SHARED/SERVICE/MASSPORT/OCIP INS. MANUAL 11
Is insured, the insurance policies covering tools and equipment shall include a Waiver of Subrogation in favor of Massport. 5. Lead and Asbestos Abatement Liability Insurance Where exposure involves lead and or asbestos abatement work, the Abatement Contractor must provide appropriate Abatement Liability Insurance with limits of $2,000,000 per Occurrence, $2,000,000 Annual Aggregate and $2,000,000 Completed Operations. 6. Protection and Indemnity Insurance Protection and Indemnity Insurance must be provided by the owner/operator of all barges, tugs and other vessels (including the Construction Manager, their Subconsultants, the Contractor and/or its Subcontractors if applicable) engaged in any marine or over water work conducted under an applicable Logan Modernization or Capital Programs Contract. Such insurance shall be for a limit of not less than $5,000,000 and include Massport as an Additional Insured with respect to any liability arising out of the use, operation and maintenance of such barges, tugs and other vessels in the performance of work under the Logan Modernization Contract. 7. Certificates of Insurance Certificates of Insurance must be furnished to the Project Insurance Broker prior to commencing work. Subconsultants shall furnish their certificates to their Construction Managers and Subcontractors to their Contractors. Massport will not execute the Contract until acceptable evidence of insurance is received by the Project Insurance Broker. The General Liability and Automobile Liability insurance carried by the Construction Manager, its Subconsultants and Contractors and Subcontractors must be endorsed to name the Owner as Additional Insured. All required insurance shall be endorsed to waive insurer s rights of subrogation against the Owner. The Owner reserves the right to require Construction Managers, its Subconsultants, the Contractors and/or Subcontractors to provide copies of policies upon request. All policies and Certificates of Insurance contain language that the insurance shall not be canceled, materially changed, or non-renewed without at least thirty (30) days advance written notice to the Authority. Such notice shall be provided to Hilb Rogal & Hobbs. SHARED/SERVICE/MASSPORT/OCIP INS. MANUAL 12
OWNER CONTROLLED INSURANCE PROGRAM Enrollment Procedures Set forth below are the Enrollment, Payroll Reporting, and Contract Closure Procedures to be followed in connection with the Owner Controlled Insurance Program. This Enrollment Package contains Forms E-1 through E-5 as well as an ERM-14 Form (Exhibit C). The Approved Contractor and Subcontractors shall provide Hilb Rogal & Hobb s with the following completed forms: A. 1. Enrollment application Approved Contractor and Subcontractor Enrollment Form (See Exhibits). 2. ERM-14 Form. Confidential Request for Information (Exhibit C). Instructions for completion of ERM-14 follow in this Section. 3. Absolute Assignment (Dividend Assignment) (Exhibit E-2). 4. Signed Experience Modification Form (Exhibit E-3) issued on Approved Contractor or Subcontractor letterhead. B. In addition to enrollment forms, the Approved Contractor and Subcontractors shall provide Hilb Rogal & Hobbs with Certificates of Insurance as specified in the Construction Contract, showing Contractor/Subcontractor Provided Insurance. C. It is suggested that a Divided Risk Endorsement (also known as a Designated Workplaces Exclusion for the Massport OCIP locations) be added to the Approved Contractor s/ Subcontractor s primary Workers Compensation policy. A sample endorsement has been included as (exhibit E-5). This endorsement places your current carrier on notice that you are participating in an OCIP. Note: All questions regarding these procedures and all completed forms should be addressed to: Hilb Rogal & Hobbs 99 High Street, 28 th Floor Boston, MA 02110-2360 Attn: Virginia Troisi Telephone No.: (617) 348-1904 Facsimile No.: (617) 348-1990 SHARED/SERVICE/MASSPORT/OCIP INS. MANUAL 13
D. Hilb Rogal & Hobbs will provide Workers Compensation insurance policies and General Liability Certificates of Insurance naming the Approved Contractors and Subcontractors as insured. E. An Enrollment Short Form is available for use by contractors who are already enrolled in the OCIP and are requesting enrollment on an additionally contract. Payroll Reporting A. Approved Contractors and Subcontractors that have performed work on the Project Site during any month will complete the Certified Payroll Report. Guidelines for report administration are: 1. Submit the report to the Massachusetts Port Authority, Risk Management Department by the 10 th day of the month for the preceding month. 2. Only the payroll of the Contractor s/subcontractor s employees who perform duties at the Project Site should be included on the Contractor s/subcontractor s payroll report. 3. If there is no payroll for the indicated period, the payroll column should show none and the form should be returned. 4. Since the premium for General Liability insurance will be based on construction values, a separate report will not be necessary. 5. The Project Manager will record the information for its own monthly progress report and forward the data to the Insurance Company. B. When the Approved Contractor and Subcontractor has completed work at the Project Site, he shall promptly notify the Construction Manager. The Construction Manager, upon approval of the work, shall complete the Notice of Completion of Work form (Exhibit E-4). This form will then be forwarded to the Project Manager. The Project Manager will forward the form to the Insurance Company. (See section titled Closure ). C. The insurance company may perform physical audits of the Approved Contractor s and Subcontractor s project payrolls periodically during the course of work and/or at the completion of work. D. Experience data for each Approved Contractor or Subcontractor will be filed with the appropriate rating authority by the Insurance Company. The loss experience of the Contractor/Subcontractor for work performed on the Project Site will affect the experience modification factor of that Contractor/Subcontractor. E. Payroll reported as described above should be excluded from payroll reports submitted to your primary insurance carriers. A Divided Risk Endorsement (Exhibit E-5) must be added to your Workers Compensation policy to assist in this process. SHARED/SERVICE/MASSPORT/OCIP INS. MANUAL 14
F. Any questions concerning the above procedures should be directed to the Logan Modernization Project Manager. Note: If contractors are on site for less than 30 days, this section will not apply. Refer to Closure section. SHARED/SERVICE/MASSPORT/OCIP INS. MANUAL 15
Closure A. Project Closure 1. When an Approved Contractor or Subcontractor has completed its work at the Project Site, the Contractor will promptly notify the Construction Manager. A Notice of Completion of Work and Request for Final Audit form (Exhibit E-4) must be completed by Construction Manager and submitted to the Logan Modernization Project Manager. Note: A contract terminates when all work is completed by the Contractor and accepted by Massport or their designated representatives. 2. Once the project is accepted by Massport or their designated representatives the Project Manager will forward closure documents to Hilb Rogal & Hobbs. 3. Hilb Rogal & Hobbs will record the information and notify the Insurance Company. 4. The Insurance Company will cancel active policies and send cancellation notices to policyholders. B. OCIP Closure At some point, Owner or the Insurance Company may wish to discontinue the OCIP. This can occur due to regulatory requirements, financial performance or change in business practice. The closure requires 90 days notice and retention of records for at least three years. If the program is closed, all Approved Contractors and Subcontractors must be notified and the following must occur: 1. Contracts must be re-negotiated with new insurance requirements similar to those that existed prior to the implementation of the OCIP. 2. New certificates confirming such coverage must be supplied to Owner by the Approved Contractors and Subcontractors. Massport and other entities as appropriate, must be named as additional insureds. 3. Final Audits will be performed by the Insurance Company and final premium adjustments will be made. SHARED/SERVICE/MASSPORT/OCIP INS. MANUAL 16
Instructions for Completing an ERM-14 Form I. Purpose and Effective Date of Change A. COMBINATION OF SEPARATE ENTITIES If 2 or more entities share common ownership more than 50% ownership in each entity, the experience must be combined for experience rating purposes and/or if two or more entities wish to be written on one policy. NOTE: Include the date interest was acquired in each entity. B. CHANGE OF OWNERSHIP Necessary if there has been a change in the name of the entity, governing board, or ownership. NOTE: Include the date the change occurred. C. MERGER OR CONSOLIDATION 1. Merger When two or more entities are merged into one surviving entity. 2. Consolidation When two or more entities are combined into an entirely new entity. NOTE: Include the date the merger or consolidation occurred. II. Information A. NAME AND LOCATION OF ENTITY Furnish both name and location of each entity before and after the change occurred. B. POLICY NUMBER List the policy number if available. C. RATING I.D. NUMBER List the rating I.D. number if available. D. List the type of entity for each column. III. Ownership Information A. When listing ownership for each entity remember: 1. List all names of owners and their individual % of ownership (each spouse s individual ownership must be listed). 2. If it is a partnership, list all general partners names and their percentage of ownership. SHARED/SERVICE/MASSPORT/OCIP INS. MANUAL 17
Instructions for Completing an ERM-14 Form (Continued) 3. If it is a corporation, list owners and their percentages of 5% or more of voting stock. 4. If an entity is other than a sole proprietor, partnership or corporation, list all members of the governing board of each entity. 5. List the total share of stock issued at the bottom of each column. B. COMBINATION Enter each entity to be combined in each of the columns. List complete ownership for all entities. Include the date ownership was acquired for each entity. Use as many columns or additional sheets as necessary. C. CHANGE OF NAME/OWNERSHIP In Column A, list the name of the entity and ownership before the change and in Column B, list the name of the entity and ownership after the change. D. MERGER CONSOLIDATION In Column A and B, enter the names of the entities and the ownership of each entity involved. In Column C, list the name and ownership of the remaining entity. IV. Signature The signature of the sole proprietor, partner or executive officer must be included on the form. Please state title. SHARED/SERVICE/MASSPORT/OCIP INS. MANUAL 18
Please see the separate Massport OCIP Claims Manual for Claims Procedures and forms. SHARED/SERVICE/MASSPORT/OCIP INS. MANUAL 19