HomeMy WebLinkAbout96.PPP OCIP Discussion_November 2015.pdf I
Aon Construction Services Group • • � � , ,
•
1 �
OCIP Status Update
Orange •
Sanitation
November 2015
Gar,T.Ward
Senior Vice Prei
up
11 lrNewport Beach,CA 92660
aorrcom •
Controlled Insurance Program Provides Solution
Owner Controlled
Insurance Program
General Liability
Excess Liability
Builder's Risk
Contractor's Pollution
Liability
• Control
• • Cost Savings
• Higher Limits of Insurance
• Better Coverage Terms
Dedicated to OCSD Projects
• Coordinated Claims, Loss Control,
Safety
Facilitate Disadvantaged Business
Enterprise (DBE) Participation
• Elimination of Redundant Insurance
Costs and Contractor Mark-Up
• Public Relations
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OCSD OCIP ANALYTICS
Program Parameters
• Original Program Term: May 15, 2008 - May 15, 2013
• Program Extension: May 15, 2013- December 31, 2015
Projects to be Extended Past December 31, 2015
• Project P1-100
• Project P1-101
• Project P2-89
OCIP Savings
$3,500,000
t
$3,000,000
$'3,004,854
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,0F�A 31
00
$0 ' i iir
Worst Case Scenario October 1,2015 December 31,2017
(Projected)
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Pro crie�ry&Connaemiai I November 2015 2 Em,asa,am„m•
OCIP Extension - Cash Flow Considerations / Options
Extend OCIP to December 31, 2017 using current Program Parameters
(Cost = $725,612)
Extend OCIP to December 31, 2017 changing Deductible from $250K to $500K
(Cost = $450,612)
• Just one loss could eliminate the potential savings of increasing your deductible to $500K and the
Option 2 deductible would apply to all future claims including construction defect claims
LA Use another Insurance Company for Extension Coverage
Viability Issues:
• Insurers would not want to provide coverage for partially completed projects
• • • • Insurers would need to charge for total construction costs of remaining projects, not"cost to complete'
Shut down OCIP December 31, 2015 and instruct Contractors to provide their own insurance
(Cost — $1,051,200)
Potential Issues:
Option • Possible Gaps in Coverage between OCIP and Contractor-provided insurance
• Insurance limits will not be dedicated to OCSD project
• Available Insurance limits may be exhausted by claims not associated with OCSD
• No guarantee for Construction Defect Coverage through the 10-Year Statute of Limitations
• No control in claims negotiations and settlements
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Pmpnetary&ConHdarbal I November2015 3 emp—R...
Aon Recommendation
Our recommendation would be to go
with Option 1 as this option would
provide the District with the most
consistent and uniform coverage
to protect all project stake holders.
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