# OCIP Insurance: What the Owner Takes on As Sponsor URL: https://mycontractorsinsurancequote.com/wrap-up-insurance/ocip Updated: 2026-10-29 · Reviewed by the Principal, Gleason Insurance Brokers, LLC Publisher: My Contractors Insurance Quote, a website of Gleason Insurance Brokers, LLC An owner-controlled insurance program puts the owner or developer in the buyer's seat: it purchases the project's liability coverage, typically general liability and excess with workers' compensation in some programs, and enrolls the GC and eligible trades. In exchange for control over carriers, limits and the completed-operations tail, the owner takes on the retention, the administrator's work and the disclosures each state requires before an enrolled contractor signs. ## Key Decision Points - The owner controls limits, carrier choice and how long completed-operations coverage lasts. - The owner also carries the deductible or retention and pays for program administration. - Bid credits must be planned before bidding, and California and Texas both require disclosure to contractors. - Lenders and investors often want to see the OCIP structure before closing. - Excluded parties still need certificates and endorsements under the owner's contract terms. ## Why Owners Sponsor the Program Themselves An owner usually sponsors an OCIP to control the insurance that protects its asset. With a traditional program, the owner relies on additional insured endorsements from the GC and every subcontractor, each written on a different form with different limits and exclusions. With an OCIP the owner chooses one carrier, one form and one set of limits, and it is a named insured on the policy rather than a party hoping each endorsement responds. Control over the completed-operations tail is often the deciding factor for developers who hold or sell finished buildings. Defect and injury claims tend to arrive after turnover, sometimes after contractors have changed carriers or closed. An OCIP lets the owner set how long completed-operations coverage lasts and with what limits, instead of depending on a dozen contractors to keep their own coverage in force for years. Owners with a pipeline of projects sometimes run a rolling OCIP that enrolls several sites under one program, which spreads the administration cost. A single large project can justify an OCIP on its own when the payroll and duration are large enough. OCIP decisions sit inside a developer's broader program, outlined in our guide to [project insurance for developers](https://mycontractorsinsurancequote.com/who-we-serve/developers-subdividers). ## What the Owner Retains: Deductibles, Collateral and Claims Wrap-up programs are commonly written with a sizable deductible or self-insured retention, and in an OCIP that retention belongs to the owner. Each covered claim up to that amount is paid by the owner, and insurers frequently require collateral, such as a letter of credit, to secure the owner's obligation to reimburse losses within the deductible. The owner also inherits the claims. Because the owner sponsors the program, it typically has a voice in how claims are handled and settled, and its loss history follows it into the next program. A job with a poor safety record can raise costs on future OCIPs even after the building is sold. Some owners shift part of the retention back to trades through a deductible chargeback clause in the subcontract. That clause should be measured and disclosed up front, because surprise chargebacks are a common source of disputes and bid padding. ### Illustrative scenario: Owner OCIP on a Medical Office Building in Sacramento A developer building a privately financed medical office building in Sacramento plans an OCIP covering general liability and excess for the GC and enrolled trades, and puts the trade packages out for bid. Because the project is nonresidential and bid, California Civil Code §2782.96 governs: the bid documents must state the premium credit or its calculation method, and the contract documents must disclose limits, known exclusions and the intended policy term. The developer's construction lender also wants the OCIP's retention secured by a letter of credit, so the developer builds that collateral into its financing before bids are released. ## California Disclosure Duties for an Owner-Sponsored Wrap California Civil Code §2782.96 applies when an owner, builder or general contractor obtains a wrap-up for a public work, as the section defines it by reference to the Labor Code, or for any other nonresidential project put out for bid. The total amount or method of calculating any premium credit required from a subcontractor must be clearly delineated in the bid documents, before anyone prices the work. The contract documents also need the policy limits, known exclusions and intended policy term, to the extent the named insured knows them. After policies issue, an enrolled party may ask for copies in writing; before then the sponsor may hand over the binder or a declaration of coverage, and recipients can share those copies only with their own broker or attorney unless the law says otherwise. Private residential wraps sit under a separate section, Civil Code §2782.95, with a disclosure list of its own, so a developer pairing a for-sale residential phase with a commercial phase should plan for two sets of disclosures. Licensing, bond and public-works context is on our page about [California construction insurance and bond rules](https://mycontractorsinsurancequote.com/california). ## Texas Deadlines Before an Owner Signs Enrolled Contracts In Texas, the owner's checklist starts with Insurance Code §151.003: at least 10 days before an enrolled contractor signs, the principal that procures the program owes it a defined information package. The package names who to call (the administrator, the principal's risk manager and each insurer's claims contact), who may enroll and the covered site, and it carries a coverage summary with form numbers, limits, sublimits, terms and material endorsements, plus guidance on whether to include or exclude program costs in the bid. It also covers audit or claims procedures that may cost the contractor money, including how any deductible assessment is calculated, plus the contractor's payroll, claims, safety-inspection and incident-reporting duties. Under §151.006, a contractor that does not receive the package on time may decline to enroll, and the principal or contractor must then pay the actual cost of that party's substitute coverage. Once work begins, an enrolled contractor can ask in writing for the full policy. Under §151.008, failing to deliver it by the later of 75 days after that request or 90 days after the contractor's covered work starts is a material breach of the contract. The owner's side of assembling that package and administering the program is covered in [how an owner runs a wrap-up program](https://mycontractorsinsurancequote.com/wrap-up-insurance/owner-controlled-program-administration). ## Lenders, Capital Partners and the OCIP File Construction lenders and equity partners usually set insurance requirements in the loan documents, and they may require the borrower to name them on the OCIP and to show the program's limits, deductible and completed-operations term. A lender may also ask how the owner will fund losses inside the retention, because that obligation sits on the borrower's balance sheet. Give the lender the OCIP structure early, with a clear statement of which parties are enrolled and which carry their own insurance. A gap between the lender's exhibit and the program terms is easier to resolve before closing than after the first draw. Typical exhibit language is reviewed in our resource on [construction lender insurance requirements](https://mycontractorsinsurancequote.com/resources/lender-insurance-requirements). ## Before You Ask for a Quote ### What to Gather - Projected construction schedule and phasing - Estimated enrolled payroll by trade - Loan and equity insurance exhibits - Owner's loss history on prior projects - Draft insurance manual and subcontract insurance exhibit - Capacity to post collateral for a deductible or retention ### What to Ask the Insurer or Surety - What deductible or retention does the carrier require, and what collateral secures it? - Can the program be written as a rolling OCIP for future phases or sites? - Who prepares the disclosure package and by what date must it reach bidders? - How long is the completed-operations extension, and can it be lengthened? - What administration fees apply, and who staffs enrollment and payroll audits? ## Broker Notes **Quick Answer:** An OCIP is a wrap-up the owner or developer buys and controls; the owner sets the limits and the completed-operations term and carries the deductible and administration. **Common Mistake:** Releasing bid packages before the bid-credit method and coverage summary are ready. In California and Texas that can breach disclosure rules and leave contractors free to reprice or opt out. **Broker Perspective:** We test the retention against the owner's balance sheet and the lender's collateral rules before recommending an OCIP, because the deductible is where the owner's real cost sits. **Coverage Impact:** An OCIP may make the owner a named insured on project liability instead of relying on contractors' additional insured endorsements, though terms typically depend on the form and endorsements issued. ## Questions Buyers Ask ### Do I still need certificates from contractors if I run an OCIP? Yes, for anything outside the program. Enrolled trades still provide proof of their own auto, equipment and off-site coverage, and excluded parties such as suppliers, haulers and design firms provide their full certificates and endorsements. Your administrator should track both groups so no one starts work without the right coverage in place. ### Can a developer run one OCIP across several projects? Often, yes. A rolling OCIP enrolls multiple projects under one program over a set period, which spreads administration costs and keeps one loss record. Each new site is usually added by endorsement, and carriers set eligibility rules for project size and type. Confirm how aggregate limits are shared among sites so one large loss does not erode protection on the others. ### Who pays the deductible on an owner-controlled program? The owner, as sponsor, is responsible to the insurer for losses within the deductible or self-insured retention. The owner may pass part of it to a subcontractor through a chargeback clause in the subcontract, but that depends on the contract terms and any state limits. In Texas, the deductible assessment method must be disclosed in the pre-contract package. ### What happens to the OCIP when I sell the completed building? The policies stay with the original program; selling the property does not transfer the sponsor's rights automatically. Completed-operations coverage typically continues for the stated term for claims arising from the insured work. Buyers often ask for evidence of that tail, so keep the policy, the administrator's records and the enrolled-party list where they can be produced years later. ## Official Sources 1. [Cal. Civil Code §2782.96 (wrap-up disclosure, public works and nonresidential)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV§ionNum=2782.96), California Legislative Information. Premium credit in bid documents; disclosure of limits, known exclusions and intended term; policy copies on written request; confidentiality limits Verified 2026-10-23. 2. [Texas Insurance Code ch. 151 (§§151.003, 151.006-151.008)](https://statutes.capitol.texas.gov/Docs/IN/htm/IN.151.htm), Texas Legislature. Principal's 10-day pre-contract information package, opt-out and cost of substitute coverage, policy copy request and material-breach deadlines Verified 2026-10-23. 3. [Cal. Civil Code §2782.95 (wrap-up disclosure, private residential)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV§ionNum=2782.95), California Legislative Information. Private residential wrap-ups follow a separate disclosure section Verified 2026-10-23. ## Related Decisions - [wrap-up insurance overview](https://mycontractorsinsurancequote.com/wrap-up-insurance) - [the GC-sponsored alternative](https://mycontractorsinsurancequote.com/wrap-up-insurance/ccip) - [comparing owner and contractor programs](https://mycontractorsinsurancequote.com/wrap-up-insurance/ocip-vs-ccip) - [owner-placed builders risk](https://mycontractorsinsurancequote.com/builders-risk-insurance) - [commercial construction project insurance](https://mycontractorsinsurancequote.com/projects/commercial-construction) --- Start a quote request: https://mycontractorsinsurancequote.com/get-a-quote · Call 844-978-7283 Contract and insurance reviews are a courtesy service that may be available at times, depending on our workload and on the size, timing and complexity of the project. A review is not guaranteed and is limited to insurance considerations. It is not legal advice and is not a substitute for advice from your own legal counsel, which you may need before signing a contract or obtaining coverage. Insurance and surety services are provided through Gleason Insurance Brokers, LLC. Site information is educational and does not constitute legal advice, a binder, an offer of coverage, a guarantee of eligibility or confirmation of policy terms. Insurance conditions are governed by actual issued policies; surety rights and obligations are governed by bond and indemnity documents.