Controlled Insurance Programs: Is it the Right Choice for Your Construction Project?
A Wrap Up or a controlled/consolidated insurance program (CIP), or wrap up, is a centrally procured and managed insurance and risk control program implemented for a construction project or a series of projects. CIPs can be purchased by the owner, an Owner Controlled Insurance Program (OCIP), or the general contractor, a Contractor Controlled Insurance Program (CCIP).
We discussed the advantages of Controlled Insurance Programs in this article, but how do you know if a CIP is the right choice for your project? The decision requires careful consideration of several factors, including project size and complexity.
CIPs are typically beneficial for larger, more complex projects involving multiple parties because they can help streamline the insurance process and provide better coverage for everyone involved. Because CIPs are designed to cover a wide range of risks, including property damage, bodily injury, and other liabilities, it’s important to consider risk level. If the level of risk associated with the project is relatively low, a traditional insurance policy may be a more cost-effective option.
Another thing to consider is whether traditional insurance coverage is available. For some risks and locations, it may be difficult to find an insurer, making a CIP the best option for adequate coverage.
Finally, if the administrative requirements associated with implementing a CIP, such as coordinating coverage, ensuring compliance, managing claims, and other insurance-related issues, are too burdensome, a traditional insurance policy may be a more practical option.
Ultimately, the decision to use a CIP should be based on a careful analysis of the project needs and an evaluation of this type of program's potential benefits and drawbacks.
The Construction team at AssuredPartners has the experience to help you navigate the complexities of a controlled insurance program and determine whether this type of policy is the right choice for you. Contact us today to learn more.
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