It is purchased by construction owner for the benefit of builders or contractors engaged with the project, which includes compensation of workers, general liability, pollution liability, builders risk and professional liability among others. OCIP is a comparatively new vehicle in insurance sector for residential projects. Due to rapid growth of defective constructive designs, these policies are becoming highly popular among the builders and the contractors (Grenier, 2001).
The study is mainly based on the analysis of OCIP versus Traditional insurance programs. Both the insurance policies play vital roles in the construction sector but OCIP provides advanced reliability than traditional insurance policies, as OCIP wraps up multiple policies provided by the owner to the contractors or the developers in a project including the facilities which are not supported in traditional insurance policies.
Risks Associated with OCIP
OCIP is commonly known as Wrap-Up Policy in United States. Both the OCIP and traditional policies were developed in 1950’s. The difference between the owner controlled insurance program and traditional insurance program lies with those who procure the policy. In OCIP, an individual party purchases insurance policies for all contractors involved in the project but in case of traditional insurance program, it is not applicable (Olson, 2006). ...