Wrap-Up Insurance (OCIP/CCIP) for NYC Developers: Who Needs It, What It Covers, and Enrollment
8 min read · Updated 2025-01-15
NYC construction wrap-up insurance programs explained: Owner-Controlled Insurance Programs (OCIP) and Contractor-Controlled Insurance Programs (CCIP), enrollment process, coverage inclusions/exclusions, and when they make sense.
Construction Wrap-Up Insurance Programs
What is a wrap-up insurance program?
A wrap-up insurance program (also called a Controlled Insurance Program or CIP) is a single insurance policy that covers the project owner, the general contractor, and all subcontractors working on a specific project under one umbrella. Instead of each contractor carrying their own GL and WC policies, the wrap-up covers all parties for the specified project. Two types: OCIP (Owner-Controlled) — the owner buys and manages it; CCIP (Contractor-Controlled) — the general contractor buys and manages it.
What are the advantages of an OCIP for a NYC developer?
OCIP advantages: (1) Cost savings — bulk purchasing power typically results in lower total premiums than the sum of individual contractor policies; (2) Consistent coverage — all parties have the same limits and terms, eliminating coverage disputes after an incident; (3) Consolidated claims management — one insurer handles all project claims, simplifying administration; (4) Elimination of subcontractor insurance compliance burden — no COI tracking needed for covered contractors; (5) Coverage certainty — the owner controls the program and knows everyone is covered.
What does an OCIP typically cover?
Standard OCIP coverage includes: (1) Commercial General Liability for all enrolled contractors on the project; (2) Workers' Compensation and Employer's Liability for all enrolled workers; (3) Builder's Risk for the construction in progress; (4) Contractor's Pollution Liability (sometimes); (5) Completed Operations (often extended post-completion). What it typically does NOT cover: contractor's own tools and equipment, off-site activities, materials in transit, defective work claims, and post-completion professional liability.
How does OCIP enrollment work?
Contractors must be enrolled in the OCIP before they begin work on the project. Enrollment involves: completing an OCIP enrollment form with details about the contractor's scope, estimated payroll, and experience modification factor; providing proof that their own insurance covering non-OCIP activities is current; and acknowledging the OCIP terms. The contractor then removes the project from their own GL and WC policies (and reduces their premiums accordingly). The OCIP administrator tracks enrollment and monitors payroll throughout the project.
What is the "OCIP credit" and how does it affect contractor pricing?
When contractors price their bids for OCIP projects, they should exclude the cost of GL and WC insurance that the OCIP covers (the "insurance credit"). The bid should reflect only the contractor's direct costs, overhead, and profit — without the insurance cost. The owner is paying for the GL and WC through the OCIP. If contractors don't properly credit the OCIP in their bids, the owner ends up paying for insurance twice. OCIP project bid instructions typically specify exactly how the insurance credit should be calculated and reflected.
When does an OCIP make financial sense?
OCIPs generally make financial sense for projects with a construction cost above $50-100 million, where the premium savings from bulk purchasing exceed the OCIP administration costs and the owner's time investment in running the program. Below that threshold, the economics typically don't justify the setup costs. For NYC's major developments (large residential towers, commercial projects), OCIPs are standard. Smaller projects typically continue using conventional contractor-carried insurance.
What is the difference between OCIP and project-specific coverage?
Project-specific insurance policies are written for a single project but purchased by the general contractor (not structured as a wrap-up). The GC buys a project GL policy that names the owner as additional insured. This is simpler than a full OCIP (no enrollment process, no broad contractor coverage) and appropriate for medium-size projects where the owner wants certainty of coverage without the complexity of running an OCIP. It's a middle ground between individual contractor policies and a full wrap-up.