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

2. University Link 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. OCIP BENEFITS Higher Limits Better Coverage Terms & Conditions
Improved
Safety
Performance
Greater
Claims Management
Control
Increased
M/W/DBE
Participation
Reduced
Loss Litigation
Cash Flow
Dedicated
Products & Completed
Operations Coverage
Better Coverage
Terms &
Conditions
Higher Limits
OCIP BENEFITS

4. University Link Light Rail Project
Advantages
The U-Link 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. University Link 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. University Link Light Rail Project
Central Link OCIP Lessons Learned
U-Link 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

7. University Link 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.

8. University Link 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. University Link 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
3 Excess Layers = $100M Limit Tower of Coverage
Builders Risk
Lexington - $100M/Occ - $100M Agg
Excess Builders Risk
2 Excess Layers = $300M Limit Tower of Coverage ($300M x $100 = $400M)
Contractors Pollution Liability
ACE - $50M/Occ - $50M Agg
Refer to OCIP Insurance Manual for more detailed description of OCIP coverages.

10. University Link 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

11. University Link 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. University Link 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 U-Link 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 J.2)

13. University Link 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 U-Link Project
OCIP Enrollment
Collection and distribution of Incident Reports
Assists in routing of Claim Reports

14. University Link Light Rail Project
INCIDENTS
vs.
CLAIMS 14

15. University Link 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.

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

17. University Link 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 to the project itself that may give rise to an insurance claim.

18. University Link 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

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

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

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

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

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

24. University Link Light Rail Project
U-LINK
OCIP POLICIES
SOUND TRANSIT
CONTRACT
SOUND TRANSIT
U-LINK
OCIP MANUAL
Contract for
Construction
Contracts for
Insurance
Contract Document 24

25. University Link Light Rail Project
Liability Claims – Contractor’s Obligations/Responsibilities
Contractor must cooperate in investigation and claim process with:
ST Risk Management
OCIP CGL Insurer, Westchester
OCIP CGL Insurer’s Third-Party Administrator (TPA), ESIS
The Contractor must refrain from:
Admitting Liability
Making voluntary payments or incurring expenses
Making repairs without direction from Resident Engineer
Assuming any obligations
Making any promises to damaged parties
(Such Actions are at Contractor’s Sole Expense)
(COMMERCIAL GENERAL LIABILITY COVERAGE FORM, CG ,
SECTION IV – COMMERCIAL GENERAL LIABILITY CONDITIONS,
2. Duties In The Event Of Occurrence, Offense, Claim or Suit, d., pg. 11 of 16)

26. University Link Light Rail Project
OCIP Primary General Liability Policy – Westchester
Insuring Agreement
The insurance company will pay those sums that the insured becomes
legally obligated to pay as damages because of bodily injury
or property damage to which the insurance applies.
(Subject to all terms, definitions, conditions, exclusions, and limitations in the policy.)
The insurance company may, at its discretion, investigate
any occurrence and settle any claim or suit that may result.
(COMMERCIAL GENERAL LIABILITY COVERAGE FORM, CG ,
SECTION I - COVERAGES, COVERAGE A BODILY INJURY AND PRPERTY DAMAGE LIABILITY,
1. Insuring Agreement, a., pg. 1 of 16)

27. University Link Light Rail Project
OCIP Primary General Liability Policy – Westchester
Duties in Event of Occurrence, Offense, Claim or Suit
Named Insured must:
Immediately record specifics and date received
Notify insurance company as soon as practicable
Immediately send insurance company any demands, notices,
summonses or legal papers received
Authorize insurance company to obtain records and other information
Cooperate with insurance company in investigation,
settlement, or defense
Assist insurance company in enforcement of any right of subrogation
(COMMERCIAL GENERAL LIABILITY COVERAGE FORM, CG ,
SECTION IV – COMMERCIAL GENERAL LIABILITY CONDITIONS,
2. Duties In The Event of Occurrence, Offense, Claim or Suit, pgs. 10 and 11 of 16)

28. University Link Light Rail Project
Liability Claims – Claim Management
ST Risk Management Division coordinates claim process
Quality control of claims handling process
Monitors claims adjusting and investigation
Note: Westchester (CGL Insurer) and ESIS (Adjuster)
Communicates with Westchester and ESIS
Reports to RE on status of claims
Meets periodically with RE and Contractor on status of claims
Westchester/ESIS will determine liability and all settlement amounts
(As noted in the CGL Policy Insuring Agreement)

29. University Link Light Rail Project
Builders Risk Coverage - What is covered
Builders Risk is a special type of property insurance that protects
the Owner and Contractor/Subcontractors with 1st Party Coverage:
Against all risks of direct physical loss of or damage to
insured property during course of construction:
While at Insured Project location
While in offsite temporary storage
While in inland transit
Includes Permanent Works and Temporary Works
(Subject to all policy terms, conditions, exclusions, and limitations)
(LEXINGTON COMPLETED VALUE BUILDERS RISK POLICY, LEXBLDRSRSK.DOC,
PART A – COVERAGE, 1. INSURING AGREEMENT and 2. PROPERTY INSURED, pgs. 4 and 5 of 22)

30. University Link Light Rail Project
Builders Risk Coverage - What is not covered
Does not cover:
Loss, theft, or damage to Contractor’s/Subcontractor’s tools,
machinery, plant and equipment, spare parts, and accessories:
Whether owned, loaned, hired, or leased, and
Not destined to become a permanent part of the
completed Insured Project.
(Contractors/Subcontractors are advised to arrange for their own
Contractor’s equipment insurance for any owned, leased,
or borrowed equipment.)
(LEXINGTON COMPLETED VALUE BUILDERS RISK POLICY, LEXBLDRSRSK.DOC,
PART B – EXCLUSIONS AND LIMITATIONS, 2. PROPERTY EXCLUDED, B., pg. 12 of 22)

31. University Link Light Rail Project
Builders Risk Claim Reporting Process Flow
Contractor
Receives Claim or
Completes ST Claim Form
1st Party Builders Risk Claims
Builders Risk Claims Asserted Against Contractors or Reported by Contractors
Sound Transit Resident Engineer
OCIP
Administration Representative
Sound Transit
Risk Management Division
Sound Transit Construction Safety
Insurer
[BR]

32. University Link Light Rail Project
Contractors Pollution Liability Coverage
Covers loss incurred as a result of a pollution condition
“Pollution condition”
Discharge, dispersal, release, escape, migration, or seepage
Of any solid, liquid, gaseous, or thermal irritant, contaminant
or pollutant
On, in, into, or upon land and structures thereon,
the atmosphere, surface water, or groundwater.
(Subject to all policy terms, definitions, conditions, exclusions,
limitations, and the self-insured retention.)
(ACE CONTRACTORS POLLUTION LIABILITY II INSURANCE POLICY,
I. INSURING AGREEMENT, pg. 1 of 8, and V. DEFINITIONS, R., pg. 3 of 8)

33. University Link Light Rail Project
Contractors Pollution Liability Claim Reporting Process Flow
3rd Party Contractors Pollution Liability Claims
Contractor Pollution Liability Claims Reported by Contractors
Contractor
Provides an Immediate Verbal Report
Followed by a
Completed Incident Report Form
Sound Transit Resident Engineer
Sound Transit Construction Safety
Sound Transit
Risk Management Division
Claims Group
OCIP
Administration Representative
Insurer
[CPL]

34. University Link 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 34

35. University Link Light Rail Project
Deductible Charge-Back System
Insurer(s) will invoice Sound Transit for all deductible costs
Includes Claim Adjustment Fees and Allocated Expenses
Sound Transit will pay insurer’s invoice for deductible costs
Deductible costs will be allocated to Contractor(s) upon the adjuster’s
investigation/apportionment of responsibility
Sound Transit will send monthly claims invoices to Contractor(s)
Contractor(s) shall reimburse Sound Transit within 30 days
Unpaid invoices will be reconciled/deducted from contractor’s payments

36. University Link Light Rail Project
Q & A
Open Discussion 36