Protect Your Business with Owners Protective Liability Coverage

As a business owner, you're constantly looking for ways to protect your assets and minimize risk. One crucial aspect of business insurance is Owners Protective Liability Coverage, which can shield you from financial losses due to lawsuits or other claims.

This type of coverage can be tailored to fit your specific business needs, with the average policy costing between $500 and $2,000 per year.

In the event of a lawsuit, Owners Protective Liability Coverage can help cover the costs of legal fees, settlements, and judgments. This can be a huge relief for small business owners who might not have the financial resources to absorb these expenses on their own.

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OCP insurance provides coverage for the project owner, also known as the named insured, from liability related to the contractor's work.

It doesn't cover claims due to the project owner's negligence, but can help cover claims related to the acts of general supervision of the contractor.

The policy is project-specific and spans from the project start to end date, which can give project owners peace of mind throughout the project timeline.

Typically, a $1M / $2M limit is requested, but additional limits are available on a case-by-case basis for an additional premium charge.

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The Owners and Contractors Protective (OCP) Liability Coverage is a limited type of insurance product designed to protect property owners from liability arising from independent contractors.

This policy only covers the property owner from liability associated with the contractor designated in the policy, and only protects the person or company insured from liability related to the contractor's operations.

The policy has two key parts to consider, which we'll explore further in the next sections.

Here are the key takeaways about the OCP Liability Coverage:

An Owners and Contractors Protective Liability policy, or OCP policy, is similar to being added as an additional insured to a commercial general liability policy, but with some key differences.

To get an OCP policy, the contractor purchases the policy with the project owner as the named and primary insured. This means the owner gets separate coverage from the contractor's commercial general liability policy.

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OCP policies have a limited scope compared to commercial general liability policies. They're designed to supplement other policies in specific cases.

OCP policies cover two main types of liability: vicarious liability for the acts or omissions of contractors or subcontractors, and liability for acts or omissions in the general supervision of the operations of contractors or subcontractors.

Here are the specific coverages provided by an OCP policy:

These coverages are separate from the contractor's commercial general liability policy, which means the owner pays a separate insurance premium and has a separate limit of coverage.

Having a clear understanding of the pros and cons of liability policies is crucial for construction project owners and contractors.

OCP policies offer separate limits that are unaffected by the liability policies of contractors or subcontractors.

One of the main advantages of OCP policies is that triggered losses under an OCP policy usually do not lead to increased premiums for CGL policies.

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The named insured enjoys additional benefits, such as advanced notice of plan cancellations.

However, OCP policies will not provide coverage if the named insured is found to be solely at fault for a loss involving a contractor or subcontractor.

The coverage for “general supervision” in OCP policies is usually left undefined and can lead to a lack of coverage.

Before obtaining an OCP policy, it's essential to ensure that your coverage meets the insurance requirements and provisions of your construction contract.

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Protecting your business from accidents and financial liabilities is crucial, especially in the construction industry where risks are high.

One way to mitigate these risks is to obtain an Owners and Contractors Protective (OCP) Liability Coverage policy. This policy provides coverage for the owner's vicarious liability for the acts or omissions of contractors or subcontractors.

The OCP policy also covers the liability for acts or omissions in the general supervision of the operations of contractors or subcontractors. This means that the owner is protected from financial losses due to the actions of contractors or subcontractors.

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Having an OCP policy can also reduce potential adversarial relations with the design team. This is because the policy provides a clear and transparent framework for addressing claims and disputes.

In case of a claim, the policy will indemnify the owner for damages or losses in excess of the design professional's available insurance or the self-insured retention, whichever is greater.

Here are some key benefits of OCP policies:

An Owners Protective Liability Coverage policy provides separate limits of insurance that are unaffected by the liability policies of contractors or subcontractors. This means you can have peace of mind knowing your coverage won't be impacted by their policies.

The policy covers vicarious liability for the acts or omissions of contractors or subcontractors, and liability for acts or omissions in the general supervision of their operations. This includes protection from losses resulting from contractors or subcontractors.

The coverage is typically triggered by losses that occur during the project, but it's essential to note that the policy won't provide coverage if the named insured is found to be solely at fault for a loss involving a contractor or subcontractor.

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Here are the key coverages provided by an OCP policy:

Keep in mind that the coverage for "general supervision" in OCP policies is usually left undefined and can lead to a lack of coverage. It's crucial to carefully review your policy to ensure you understand the scope of coverage.

Owners Protective Liability Coverage is a type of insurance policy that provides financial protection to property owners against liability arising from construction projects. This policy is often a cost-effective alternative to project-specific professional liability policies.

One of the key benefits of Owners Protective Liability Coverage is that it offers increased financial security through ultimate control of the program. This means that the policyholder has more control over the insurance program and can make informed decisions about their coverage.

The policy will indemnify the owner for damages or losses in excess of the design professional's available insurance or the self-insured retention, whichever is greater. This provides an added layer of protection for the property owner.

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There are several types of Owners Protective Liability Coverage, including Owners and Contractors Protective (OCP) Liability Coverage and Owners Interest Policy (OIP). These policies can be customized to meet the specific needs of the property owner.

Here are some key features of Owners and Contractors Protective (OCP) Liability Coverage:

The OCP policy also provides additional benefits, such as advanced notice of plan cancellations. However, it's essential to note that the limited coverage of OCP policies can also have some disadvantages, such as not providing coverage if the named insured is found to be solely at fault for a loss involving a contractor or subcontractor.

Ultimately, Owners Protective Liability Coverage is an essential consideration for property owners involved in construction projects. It provides financial protection against liability and helps to mitigate the risks associated with these projects.