Owner Controlled Insurance Programs (OCIPs) are commonly used in large construction projects to provide comprehensive insurance coverage, including workers’ compensation, general liability, and excess liability. While this centralized insurance arrangement can yield significant premium savings and streamlined risk management, it also imposes specific requirements and responsibilities on temporary staffing firms.
Key considerations for staffing firms:
- Enrollment and documentation
- Enrollment forms: These forms typically require information about your workers’ compensation and general liability policies, such as classification codes, policy rates, and modifiers. Accurately completing and understanding these details is important for integrating your coverage with the OCIP and for financial adjustments like bid deductions.
- Insurance documentation: Submitting copies of your policy declaration pages along with the OCIP enrollment form is necessary to validate your existing coverage and the deductions from the OCIP.
- Insurance management
- Coverage gaps: Ensure that your firm’s insurance extends to areas not covered by the OCIP, such as automobile liability. This is particularly important for activities that occur outside the OCIP-covered project site.
- Policy adjustments: Review your policies for any exclusions specific to work under OCIPs and consider obtaining endorsements to cover these exclusions where possible.
- Financial and administrative impact
- Payroll tracking: Accurately tracking and segregating payroll for employees involved in OCIP-covered projects is crucial. This ensures correct insurance premium calculations and avoids financial discrepancies during audits.
- Administrative load: Be prepared for the additional administrative workload required to comply with OCIP requirements, including complex paperwork and regular coordination with the OCIP manager.
- Risk management
- Claims management: Workers’ compensation claims under OCIPs will not affect your firm’s individual loss ratios, but they will impact your experience modification factor. Understanding how OCIP claims are handled can help you manage your firm’s risk profile.
- Contractual obligations: Pay close attention to the terms of the OCIP contract, especially regarding deductibles and responsibilities for providing light duty work in case of employee injuries.
- Strategic benefits
- Competitive advantage: Effective management of OCIP participation can enhance your firm’s value proposition by demonstrating your ability to handle complex insurance and risk management environments.
- Safety and loss control: Leveraging the centralized safety and loss control measures under OCIPs can reduce incident rates and improve workplace safety for your employees.
As the landscape continues to evolve, stay informed and adaptable in order to fully leverage the benefits and minimize the challenges associated with OCIP participation. To learn more, click here.
