OCIP vs CCIP: what subcontractors need to know before bidding
OCIP vs CCIP: what subcontractors need to know before bidding
By O. Rickey Harris, Harris Insurance
If you bid on a large data center job, there’s a good chance it runs on a wrap-up. A wrap-up is one insurance program that covers many of the contractors on a single project. It changes how you bid, how you report payroll, and what your own insurance has to do. Here’s a plain explanation from the subcontractor’s side.
What a wrap-up is
On a normal job, each contractor brings its own workers’ comp, general liability, and umbrella. On a wrapped job, the owner or general contractor buys one program that covers enrolled contractors for work on that site. The program usually includes workers’ comp and employer’s liability, general liability, and excess liability. Some also include builder’s risk or professional liability.
There are two main types:
- OCIP (owner-controlled insurance program): the project owner buys and controls the program.
- CCIP (contractor-controlled insurance program): the general contractor or construction manager buys and controls it.
For a subcontractor, the day-to-day experience is about the same. The main difference is who you deal with when there’s a question: the owner’s administrator or the GC’s.
Why owners and GCs use them
Large projects with hundreds or thousands of workers on site are where wrap-ups are most common. The sponsor gets one set of policies, one safety program, and one claims process for the whole site. That control is the reason they’re common on big data center builds.
How it changes your bid
This is where subcontractors most often lose money. On a wrapped job, you’re usually asked to bid net of insurance. That means you remove the cost of the coverage the wrap provides, because the sponsor is paying for it.
Most programs use an insurance cost worksheet to figure out that deduction. A Marsh report on specialty contractors (published through ENR) points out that many contractors wait until after the award to complete these worksheets, which can lead to mispriced bids and unexpected shortfalls.
A few practical points:
- Get the wrap manual and the worksheet before you price the job.
- Know what your own insurance actually costs you per dollar of payroll, by class.
- Don’t deduct more than the wrap actually replaces. You’ll still pay for your auto, equipment, and off-site coverage.
- Ask your agent to check the numbers with you.
Enrollment is your job to get right
Enrollment is not automatic. Wrap manuals we’ve reviewed, including the Port Authority of NY & NJ and Yale manuals, require contractors to enroll and receive confirmation before starting work. Missing paperwork can leave you excluded from the program, and then your own policy has to respond.
Typical enrollment steps:
- Complete the enrollment form for your company and each lower-tier sub.
- Provide a certificate showing your own (non-wrap) coverage.
- Get written confirmation and, often, a wrap certificate.
- Set up monthly payroll reporting through the administrator’s system.
Many programs also set a maximum experience mod. A common cutoff is 1.00, sometimes with a waiver process for contractors who can document a strong safety program. If your mod is higher, find out early.
What the wrap doesn’t cover
This is the part subcontractors forget. A wrap covers your work on that site. It usually doesn’t cover:
- Your vehicles. Auto liability stays on your own policy.
- Your shop, yard, or fabrication work done off site
- Your tools and equipment
- Your other jobs
- Workers or lower-tier subs who weren’t enrolled
- Claims after the wrap’s completed operations period ends
Meanwhile, your own general liability policy will usually exclude the wrapped site. That’s normal, but it means the two programs need to fit together. A gap between them is your problem, not the sponsor’s.
Payroll reporting
You’ll usually report payroll to the wrap administrator every month, by class code. You’ll also report your full payroll to your own workers’ comp carrier at audit. Make sure the wrapped payroll is separated so you aren’t charged twice for the same exposure. Clean records make this easy. Messy ones make it expensive.
When the job ends
When your scope is done, the wrap usually needs a termination notice from you. Coverage for completed operations continues for the period the program sets. After that, or for claims outside the program’s terms, your own general liability may have to respond. Keep your enrollment letters, certificates, and termination notice in the job file.
A short checklist
- Read the wrap manual before you bid.
- Complete the insurance cost worksheet before you price the job.
- Confirm your mod meets the program’s limit.
- Enroll yourself and your lower-tier subs before mobilizing.
- Keep your own auto, equipment, umbrella, and off-site coverage in force.
- Report wrap payroll monthly and separate it at your own audit.
- File a termination notice when your work is complete.
How we help
We don’t sell wrap-ups. Owners and general contractors buy those through large national brokers. We work with the subcontractors and staffing firms inside them, making sure your own program fits around the wrap and that your bid doesn’t give away money. Learn more about our wrap-up help for subcontractors.
O. Rickey Harris, Harris Insurance (Old National Insurance Inc.), Jasper, Alabama
