Owner Controlled Insurance Programme (OCIP)

We are delighted to present another in a series of insights relating to key risks facing the Real Estate sector. Jon Phillips the Managing Director for our Real Estate Division, considers some of the main aspects of this key cover in relation to Owner Controlled Insurance Programmes (OCIP).

Stackhouse Poland is an award-winning independent insurance broker, with specialist expertise in the Real Estate and Construction sector. Our dedicated Real Estate division delivers practical, intellectual and entrepreneurial expertise and sector specific solutions.

With a variety of commercial and infrastructure projects underway in the UK, the construction sector is set to benefit from this growth. As activity increases, insurance has an important part to play in its future success.

Historically, the standard default position was for the main contractor to arrange the contract works insurance and any associated liabilities. However, this approach can leave an employer vulnerable in the event of contractor liquidation or a delay in completion. Rather than rely on the main contractor arranging the insurance programme for your development, greater control and choice can be gained by arranging an Owner Controlled Insurance Programme (OCIP). This policy will be arranged for the whole contract period and duration of construction. It is designed to deliver an insurance solution that meets the needs of all interested parties in the joint names of the Developer/Employer and contractors of all tiers. One policy is issued which provides greater control for the Developer.

There are significant advantages for the Employers/Owners to effect the major insurances on behalf of themselves but all Contractors and Sub-Contractors. The advantages can be summarised as follows:

  • Control – The cover purchased by you will be designed to fit your individual project requirements. By arranging an OCIP, the Employer has the ability to determine the level of self retention/policy deductible, according to their risk appetite and selects the appropriate Sum Insured and tailor the policy accordingly. It will avoid issues on many levels should the Contractor go into liquidation. Contractors of all tiers can be included in the programme, if required and one policy should eradicate any overlaps or gaps in cover.
  • Cost – The premiums for Contractors All Risks are usually the most expensive insurance on any construction project. An OCIP should produce cost savings, when compared to a Contractors annual insurance programme and the insurance cost is known and fixed from the outset of the project. The cost savings are achieved as duplication and overlap of insurance programmes are eliminated. Also staged premium payments are more achievable where required.
  • Claims Management – There will be direct control over settlement of claims and the use of claim monies, where claim payments can be made direct to the Employer. This translates into the developer exercising more control in terms of reinstatement of damage and payment to the contractor for additional works. One dedicated Loss Adjuster can be nominated to work with the client for the duration of the contract which means extra layers of consistency.
  • Delay in Start Up insurance – This means the ability to insure against the risk of delay in Practical Completion caused by an insurance claim. The policy can be extended to cover the client’s loss in the event of a damage claim preventing completion of the project on time. Damage following the operation of an insurance peril allows the contractor to apply for an extension of time without penalty. In addition, this risk cannot be insured on behalf of the developer if the Contract Works insurance is arranged by the Contractor
  • Choice of Insurer – There is freedom to choose an insurer with good security, to dictate the basis of cover and to ensure that it is maintained at an adequate level throughout the period of the contract.
  • Risk Management – Facilitates a uniform and disciplined approach to risk management and can either be arranged in conjunction with the insurer or alternatively the ability to bring in a specialist risk manager.
  • Lenders requirements – Financiers’ requirements are usually complicated in terms of satisfying the myriad of lenders needs. The OCIP is normally the financier’s preferred approach.

A few examples of the policies we have arranged  provides a flavour of our capabilities:

The largest project we have been involved with, in recent times, involved the demolition and subsequent redevelopment of two large Hotels into high end residential, incorporating new basement levels and the development above ground of residential accommodation comprising a new seven storey building. The project was complicated by the retention of facades and the intricate engineering required. The cost of the project was £250m over a duration of 4 years to complete. We worked closely with all parties and in tandem with insurers risk manager, successfully recommended the installation of a water detection system, which still serves the property well to date.


Working closely with a developer client, we have arranged OCIP for 5 different developments with a combined contract value of £168m. The contracts included demolition and subsequent redevelopment of mixed use occupation together with two large new build designed for student accommodation. For each project, we retained a consistent approach in terms of nominated loss adjuster and insurer with the successful culmination of all projects despite various issues, including delays, retained facades and a near miss caused by the contractor.


A contract, just about to reach successful conclusion has involved the partial demolition and subsequent redevelopment of a property into mixed use Retail, Office and Residential. The contract value is in the region of £120m and has involved cultivating an in depth working relationship with the developer, project manager, insurer and future property manager. There were also complicated lenders requirements which we successfully negotiated with insurers .

At Stackhouse Poland, we have access to comprehensive, often bespoke policy wordings. Our relationships with our key partner insurers means we have access to competitive premiums whilst still obtaining the widest coverage for our clients. We will deliver reduced administration, flexibility, comprehensive coverage, efficient claims resolution & seamless protection.

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