FAQs - Page 2

What does the CIP Plan cover?

• The CIP will cover Workers' Compensation claims at or emanating from the project site for employees of covered contractors, subcontractors, and sub-subcontractors (“contractors”). The term “emanating from” shall mean the exposure of a CIP enrolled contractor's employee, whose payroll is being reported on the job site, sustaining injury while performing work directly related to their occupation at or near the project site. The employee who is sent on special assignment to pick up a special tool or other property who sustains an injury while in the course and scope of this assignment would be covered for Worker's Compensation benefits by the CIP. The employee who is fabricating material off site would not be covered under the CIP; rather the contractor's master insurance program would cover the loss.
• Covered contractors are those with on-site payroll. The CIP is not intended to cover work off the Project Site.
• It will cover the Commercial General Liability and Products and Completed Operations risks of these participating contractors during the construction of the project. The Products and Completed Operations coverage is generally extended for five years after the completion of the Project.
• General and Excess Liability policies will be written on an occurrence form.
• It will not cover Automobile Liability, Contractor's Equipment, Automobile Physical Damage, Tools, or other risks of the contractor.
• It will not cover contractors for any operations not associated with the Project.
• All participating contractors will have individual Workers' Compensation policies issued to them covering their work at the Project Site, and a certificate of Primary and Excess Commercial General Liability insurance, indicating participants as named insureds, but only for work connected with the CIP Project.

What is the reason for having a CIP?

• To reduce the cost and redundancy of insurance associated with commercial construction;
• To establish great stability in insurance coverage for contractors and subcontractors, engaging a major insurer whose financial stability suggests that it will still be there to cover claims when and if they occur;
• To alleviate the adversarial relationship between contractors at the time of a Completed Operations claim, allowing the claim to be defended and settled in a proactive manner, reducing claim costs for all participants; and
• To unify and centralize the insurance resources available to support job-site safety and claims management as well as quality control inspections. The CIP concentrates a greater amount of money for these important services.

How can I be sure my insurer will not charge me for the CIP risk?

• You will need to notify your insurers of the CIP, through your agent or directly, giving a description of the risk and the CIP coverage.
• It will be important for you to keep your books to reflect payroll allocated to the CIP project so that Workers' Compensation auditors from both your own carrier and the CIP carrier can make the payroll audit accurate. Your payroll records must be available to the CIP insurance company auditor at any time during the policy period and up to three years after completion of the project.
• The same will apply to the Commercial General Liability Insurance, though the basis of your premium charge may not be payroll - it could be receipts or some other measure of exposure.
• If you have questions about these issues as the bidding and work proceed, your broker, agent, or underwriter should be able to identify the distinction. If not, we will be very happy to assist you in identifying the issues and, if needed, facilitating communication with your insurers.

What about the CIP "Safety Plan"? How will this plan benefit me?

• A site-wide safety plan will be employed and will help coordinate the efforts of safety. It is not uncommon for a serious hazard to be caused by another contractor working in close proximity to your crew. A site safety plan will help reduce the hazards involved in large complex construction projects.
• You will benefit from the highly focused safety activity under the CIP. That should result in better than average loss experience. To the extent this safety activity has a positive influence on your loss experience, that would reflect in an improved experience modifier for you in future years.

How will the CIP "Claims Management Plan" benefit me?

• The claims management plan will ensure a thorough investigation of every serious accident. The causes will be clearly understood, to the extent they can be known, and will allow for proper preparation of defense against possible future litigation.
• The relevant statistical outcome of actual loss experience will be shared with the CIP participants, thus identifying patterns and causation that would otherwise not be seen. That will add strength to your loss prevention efforts.
• Claim cost containment programs will be used, which reduces claim costs.
• From an historical and statistical perspective, strong safety and claims management plans produce better than average loss experience in most CIP projects.