Things to Consider

Once the OCIP or CCIP has been purchased, there are still things to consider and decisions to make. Developing a strategy early-on will help avoid problems in the future.

Many builders take the following into consideration:

Subcontractor Pre-Qualification
Determine who you want on your jobsite; the quality of the subcontractors is paramount to a successful project. 

Deductibles/Self-Insured Retention (SIR) Participation
The Program probably includes either a deductible or an SIR, which only the purchaser of the Program is responsible for paying. Program participants can contribute toward the deductible or SIR.  There are pros and cons associated with this type of decision that should be discussed with an attorney and/or insurance agent or broker. We can help provide information related to making this decision.

Pre-Bid/Pre-Construction Meetings
These meetings are excellent venues to introduce and "set the stage" for the Program. Having a third party in attendance to explain the OCIP or CCIP, outline the advantages of participating in this type of Program, advise who to call with questions, and explain how deducts are done and what the enrollment process entails can go a long way to ensure successful implementation of the Program. The Program administrator should be involved and in attendance.

Percentage Deducts/Actual Deducts
A deduct is the portion withheld or deducted from progress payments made to the OCIP or CCIP participants that help offset the cost of the Program.  In other words, the amount the participant included in its bid for the cost of program-provided insurance is withheld. Therefore, the insured is not paying the subcontractors' insurance costs for the same types of coverage provided by the Program.

Audits
Although the Program's insurance carrier will audit the participants to reconcile estimated premiums to actual premiums, a decision must be made as to whether or not internal audits should be performed.  The audits would be completed following notification that the OCIP or CCIP participant has completed its work on the jobsite. Doing internal audits allows for the reconciling of premium differences before the insurance carrier does and may also result in higher deduct amounts. This is important so that the insured is not surprised by any adjustments and is able to plan for funding any premium increases.