Sooner or later, if you are doing business as a flooring contractor, you will have no choice but to be part of an OCIP. So, what is it? OCIP is an Owner (of the building) Controlled Insurance Program. OCIP is also called a "Wrap Up" and has been developed in order to combine insurance coverage's safety coordination and claims reporting into one package. It encompasses all eligible contractors on the project site.

An OCIP is a single insurance program that insures the owner, all enrolled contractors, subcontractors, and others designated by the owner for work performed and property located at the project site and is project specific. However, insurance coverage and limits provided under the OCIP are limited.

Workman's compensation is generally the primary focus of OCIP. Flooring contractors must keep weekly payroll records and send to the OCIP Company designated on a monthly basis. The hourly paid wage is usually reported, not including overtime surcharges. Some questions asked may include many of the following: Legal name of your company, address, telephone number, original contract value, description of work to be performed, unit prices for various products or services, the value of change orders, and location of stored materials, if any. Typically, you must submit a current certificate of liability insurance and include policy numbers for general liability, auto, umbrella liability, and workmen's compensation.

Under most OCIPs, the standard policy covers on-site worker's compensation and general liability coverage. Automobile liability coverage is usually excluded from OCIP. You usually fill out a form that lists your basic premiums and, most importantly, your experience modifier for workmen's compensation. You also calculate the amount of hours required for the completed job. A formula is given and you then calculate the anticipated insurance premium for workmen's compensation and general liability on this project. The owner deducts this from your base bid.

At the end of the year, all your OCIP jobs are totaled and submitted to your individual insurance company. The insurance company will deduct the hours and the amount from your final bill and credit your firm. The hardest part is keeping track of the hours in a methodical manner since forms for each project will be different. Without an effective report, you will spend more than necessary for insurance. Make the best of an OCIP requirement by knowing what to do so it doesn't cost you money.