Three Key Considerations When Using OCIPS
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OCIPs and Staffing Business Insurance Coverages
A lot of staffing companies are starting to fill positions for their clients that are covered by OCIPS; therefore, it’s important to understand OCIPS and how the program insurance works in conjunction with your own insurance when placing temporary employees in these jobs.
What exactly is an OCIP? Well, it’s an Owner Controlled Insurance Program. Most common in the construction industry, an OCIP is an insurance policy designed for large projects that cover every contractor and subcontractor working on a specific project or jobsite. OCIPS can be structured a variety of ways, but commonly include workers’ compensation, general liability and excess liability coverages.
Why do OCIP’s exist?
Project owners choose to utilize a controlled insurance program for advantages such as premium savings, control over the limits and scope of coverage, as well as centralized risk management. But there are advantages for you as the temporary employer as well, such as:
- Broadened safety and loss control
- Centralized claims management
- Less finger pointing since all the contractors are covered on one project
The primary disadvantage for you is the additional paperwork and administration.
OCIP Enrollment and Administration
When placing a temporary employee at a project covered by an OCIP policy, there are a couple of things you’ll be required to do:
- Complete an OCIP enrollment form. Enrollment forms are important because it provides the OCIP manager with the cost associated with your own insurance. These insurance costs are then deducted from your bid to reduce the overall contract amount. In order to complete these forms, you’ll need to know your workers’ compensation and general liability classification codes and policy rates, along with any rate modifiers (e.g. experience mod) and schedule credit. These forms can often be complex and your insurance broker can help you complete them.
- Include copies of your workers’ compensation, general liability, excess or umbrella liability policy declaration pages. These documents must accompany the enrollment form in order to provide proof of the deduct amounts.
- Provide a copy of your standard Certificate of Insurance. This shows you have coverage for policies not provided by the OCIP, such as automobile liability and to verify you have coverage in place for work being performed by your company away from the project site.
- Track and segregate payroll under OCIP projects. This allows you to deduct it from your own insurance program at time of audit. Not properly tracking the payroll will result in you essentially paying for it twice, because you’ll not be able to deduct it from your own program.
Important Things to Remember
- Workers’ compensation claims paid under an OCIP policy will not show up on your individual loss runs or count against your individual carrier loss ratios, but it’ll affect your individual experience mods.
- Some liability policies contain a specific exclusion for work performed under an OCIP. In this situation, we suggest endorsing your own policy to include excess coverage for work performed under an OCIP, if that’s available to you.
- Review the fine print. OCIP language can vary quite a bit from contract to contract, so pay special attention to the fine print. How are deductibles assessed in the event of a loss? Who’s responsible for providing light duty work in the event your employee is injured and for what period of time? Understanding these things ahead of time will give you better contract negotiation up front, and result in fewer surprises in the event you actually have to use the insurance.
- Workers’ Compensation: Back to Basics Seminar
- Workers’ Compensation: A Deep Dive Seminar
- Workers’ Compensation: Bottom Line Impact Seminar
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