CCIP - Practice/Off-Site Policies

[Vanessa Torrealba]

I have a client, a developer, to whom I issued a Builder Risk policy for a 263-unit condominium. The CCIP was acquired directly by the construction company through another Broker. My client allocated an item in his construction budget to cover the premium for said CCIP, and this expense was paid to the builder in 2021 when the project began. Now the project is in the final phase, they are working on obtaining the Certificates of Occupancy, and the Builder issues a new invoice to my client (developer or owner of the project) whose description includes "Practice Policies/Off-Site Coverage". The first invoice was for $355k and this final invoice (not budgeted in the project) is for $169k.

I have zero experience with CCIP and its derivatives, so I don't know what they mean by Off-Site policies. For those who work this type of risk, is it normal for this to happen?

 

[AZDave]

I'll take a stab at it: The subs need to provide proof of offisite coverage that includes all lines not covered by the OCIP - Auto, WC ( unless part of the OCIP ) Excess. Maybe their was a failure in obtaining these and costs then passed up?

Or, I could see some type of finalized OCIP premium due based on Actual payroll charges by subs VS the Estimated...

I'm curious on the real reason here too. I do mainly the artisan contractor and GC's, but yet to write a CCIP policy, and not sure I want to....

 

[Vanessa Torrealba]

@AZDave Ok, that clears things up a bit for me. Thanks for taking the time. I understand you perfectly, this same client is going to develop a new project for which, apart from Builder Risk, he is asking me to do the Wrap up as well, but it terrifies me a bit because I feel that it is a very complex product.

 

[Matt P Obrien]

Regarding the additional invoice for off-site coverage, it's not uncommon for unexpected expenses to arise during construction projects. While it's best to budget for all potential expenses, some may only become apparent during the final stages of construction. If the off-site coverage is a required part of the project, it's normal for the builder to issue an invoice for this additional expense.