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Northgate Link Extension Light Rail Project Owner Controlled - PowerPoint PPT Presentation

Northgate Link Extension Light Rail Project Owner Controlled Insurance Program (OCIP) Presented by Sound Transit Risk Management Division 1 Northgate Link Extension Light Rail Project What is an Owner Controlled Insurance Program (OCIP)? An


  1. Northgate Link Extension Light Rail Project Owner Controlled Insurance Program (OCIP) Presented by Sound Transit Risk Management Division 1

  2. Northgate Link Extension Light Rail Project What is an Owner Controlled Insurance Program (OCIP)? An OCIP is a controlled insurance program that insures: • Sound Transit, • University of Washington, • General Contractors, • Enrolled Subcontractors, and • Other designated parties, for Work performed at the Project Site and designated off-site activities associated with the project (if any). 2

  3. Higher L Lim imit its Better C r Covera rage Terms & s & Condit itio ions Dedic icate ted Products ts & & Comple lete ted Operati tions ns C Coverage OCIP Improved Ca Cash F Flow BENEFITS Redu duced Loss L Lit itigation Increased M/W/DB DBE Partic icipa ipatio ion Improved Safe fety Great ater Perf rforman ance Claims Cl ms M Management Control 3

  4. Northgate Link Extension Light Rail Project Advantages • The Northgate Link Extension OCIP is a “project-specific” OCIP • Complies w/ UW Contract Requirements (ST/UW MOA and MIA) • Provides dedicated limits of insurance for large projects • Removes gaps in insurance coverage, e.g. Builders Risk • Coordinates loss control and claim process (control political risk) • Improves risk management of multiple Contractors/Subcontractors • Provides potential cost savings over traditional insurance 4

  5. Northgate Link Extension Light Rail Project Disadvantages OCIP management reporting may result in additional administrative burden • OCIP Insurance Cost Worksheet (Pre-Award) and Change Orders • OCIP Insurance Application • OCIP Enrollment • OCIP Insurance Deduct Audits • Claim Reviews (including claim investigation support, etc.) 5

  6. Northgate Link Extension Light Rail Project Central Link OCIP & U-Link OCIP - Lessons Learned Northgate Link Extension OCIP Improvements Made • Comprehensive OCIP Insurance Manual • Pre-Bid & Pre-Con Orientation • Contractor Claim Deductible Responsibility • Insurance Claims Adjustment Procedures • Contract Enforcement & Contractor Cooperation • On-Site OCIP Administration Representative 6

  7. Northgate Link Extension Light Rail Project Who is Covered? • Sound Transit’s interest in project(s) • University of Washington’s interests • Additional Insureds as required by agreements • Contractors who have: – been awarded contract/subcontract work; – met the enrollment requirements; and – been issued a Certificate of Insurance. 7

  8. Northgate Link Extension Light Rail Project Who is NOT Covered? • Parties not involved in day-to-day construction activities – Examples include:  Contract Haulers or Truckers  Vendors, Suppliers  Architects & Engineers  Other Professional Services firms  Hazardous materials remediation contractors 8

  9. Northgate Link Extension Light Rail Project Sound Transit Furnished OCIP Insurance • Primary Commercial General Liability (CGL) – Westchester - $1M/Occ - $2M Agg – Includes Stop-Gap Employers Liability • Excess Liability – 9 Excess Layers = $100M Limit Tower of Coverage • Builders Risk – ACE / Munich Re / Hiscox / XL - $400M/Occ - $400M Agg • Contractors Pollution Liability – Illinois Union (ACE) - $50M/Occ - $50M Agg Refer to OCIP Insurance Manual for more detailed description of OCIP coverages. 9

  10. Northgate Link Extension Light Rail Project Contractor Responsibility for Deductibles/Self-Insured Retentions • Commercial General Liability - $100,000 per Occurrence • Builders Risk - First $250,000 per Occurrence • Contractors Pollution Liability - $250,000 per Occurrence 10

  11. Northgate Link Extension Light Rail Project Contractor Furnished Insurance • Automobile Liability – $1M Combined Single Limit • Workers’ Compensation and Employers Liability – Workers’ Compensation - Statutory in Washington State – Stop-Gap Employers Liability - $1M • Commercial General Liability and Excess/Umbrella Liability – $1M/Occ & $2M Agg Enrolled Contractors and Subcontractors must provide current Certificates of Insurance to Sound Transit through OCIP Administration Representative. 11

  12. Northgate Link Extension Light Rail Project OCIP Insurance Manual • Your reference for all OCIP protocols and procedures • Defines program requirements • Lists OCIP insurance coverages • Includes forms with explanations • Available on the Northgate Link Ext OCIP Website • Other sources: – OCIP Administration Representative – Sound Transit Risk Management Division Note: In the event of conflicts of OCIP coverage and terms between the Contract Documents (the Contract and the OCIP Insurance Manual) and the actual OCIP policies, the OCIP policies will prevail. (Contract Art. 8.01.J.2) 12

  13. Northgate Link Extension Light Rail Project OCIP Administration Representative (OAR) • Conduit for Information Flow Between Resident Engineer, ST Risk Management, ST Construction Safety, and Contractor(s) • Facilitates Administration of Sound Transit’s OCIP on the Northgate Link Extension Project – OCIP Enrollment – Collection and distribution of Incident Reports – Assists in routing of Claim Reports 13

  14. Northgate Link Extension Light Rail Project INCIDENTS vs. CLAIMS 14

  15. Northgate Link Extension Light Rail Project Incident Reporting Contractors and Subcontractors must: • Complete Incident Report Form before end of shift NOTE: This form is NOT used to establish an insurance claim. • Provide complete documentation of incident • Complete description (What happened?) • Photographs (Preserve evidence) • Witness statements, if any • Deliver completed Incident Report Form and documentation to OCIP Administration Representative for distribution. 15

  16. Northgate Link Extension Light Rail Project Incident Reporting Process Flow Incidents Reported by Contractors, Sound Transit Employees, or Security Incident Report Incident Report Incident Report Completed by Completed by Completed by Contractor or Sound Transit Security Subcontractor Employees Sound Transit Resident Engineer OCIP Sound Transit Sound Transit Administration Risk Management Division Construction Safety Representative Insurers [CGL] [BR] [CPL] 16

  17. Northgate Link Extension Light Rail Project Incident Reporting - Incident Definitions • Safety Incident – Any accident resulting in bodily injury or property damage to any individual (Contractor or Third-Party) or to the project itself; or, any near miss that had the potential of concluding similarly. • OCIP Incident – Any accident resulting in bodily injury or property damage to any individual (Contractor or Third-Party) or to the project itself that may give rise to an insurance claim. 17

  18. Northgate Link Extension Light Rail Project Incident Reporting When incident occurs, Contractor/Subcontractor must: • Alert Resident Engineer and OCIP Administration Representative (OAR) immediately and simultaneously – OAR will then notify:  Construction Safety Manager  ST Risk Management Division • At Resident Engineer’s direction, take reasonable steps to: – Preserve evidence in accordance with proper protocols – Mitigate the loss – Protect undamaged property – Assist as required in investigation process 18

  19. Northgate Link Extension Light Rail Project OCIP Insurance Claims Majority of Claims: • 3 rd Party CGL Claims • Builders Risk Claims Commercial Builders Risk Contractors General Liability Pollution Liability 3 rd Party 1 st Party 3 rd Party 19

  20. Northgate Link Extension Light Rail Project Claims Reporting Procedure • Claims Against Sound Transit (or claims that name both Sound Transit and Contractor) – 3 rd Party must present a Sound Transit or Washington State Claim Form to Sound Transit Board Administrator 20

  21. Northgate Link Extension Light Rail Project Claims Against Sound Transit Reporting Process Flow Claim Form Completed 3 rd Party Claims Against ST Formal Claims Presented to Sound Transit Delivered/Mailed to by Members of the General Public Sound Transit Board Administrator Sound Transit Risk Management Division Sound Transit OCIP Insurer Sound Transit Construction Safety Administration [CGL] Resident Engineer Representative Contractor 21

  22. Northgate Link Extension Light Rail Project • Claims Against Contractor – 3 rd Party presents claim to Contractor (only) – Examples:  Attorney Demand Letter  Other Written Notice  Summons and Complaint – 3 rd Party need not present Sound Transit or Washington State Claim Form 22

  23. Northgate Link Extension Light Rail Project Claims Against Contractor Reporting Process Flow 3 rd Party Claims Against Contractor Attorney Demand Letter, Other Written Claims Presented to Contractors Demand, or Summons and Complaint Delivered/Mailed to Contractor by Members of the General Public Sound Transit Resident Engineer OCIP Sound Transit Sound Transit Administration Risk Management Division Construction Safety Representative Insurer [CGL] 23

  24. Northgate Link Extension Light Rail Project SOUND TRANSIT SOUND TRANSIT NORTHGATE CONTRACT NORTHGATE LINK LINK EXTENSION EXTENSION OCIP POLICIES OCIP MANUAL Contract for Contract Document Contracts for Insurance Construction 24

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