What is the Primary Insurer: OCP or CGL?

As an insurance advisor, one of the common questions I receive is whether theprimary insureris OCP or CGL. In this article, I will provide a detailed explanation of what OCP and CGL insurance policies are and which one serves as the primary insurer.

What is OCP Insurance?

OCP stands for Owner's and Contractor's Protective Liability insurance. This type of insurance policy is designed to provide coverage for third-party bodily injury or property damage claims arising from the actions of contractors or subcontractors working on behalf of the policyholder. OCP insurance is typically purchased by property owners, general contractors, or construction managers who hire subcontractors to work on their projects.

What is CGL Insurance?

CGL stands for Commercial General Liability insurance. This type of insurance policy provides coverage againstliability claimsfor bodily injury or property damage arising from your business operations, products, or services. CGL insurance is an essential coverage for most businesses, as it can protect them from a wide range of liability claims, including slip and fall accidents, product liability claims, and advertising injury claims.

Which Policy Serves as the Primary Insurer?

The answer to this question depends on the circumstances of the claim. In general, if a contractor is working on behalf of the policyholder and causes bodily injury or property damage, the OCP policy would serve as the primary insurer. On the other hand, if the policyholder's business operations or products cause bodily injury or property damage, the CGL policy would serve as the primary insurer.

For example, suppose a construction worker employed by a subcontractor causes property damage while working on a project. In that case, the OCP policy would provide coverage for the damages. In contrast, if a customer slips and falls in a business owned by the policyholder, the CGL policy would provide coverage for any resulting bodily injury claims.

Final Thoughts

As an insurance advisor, I always recommend that my clients carry both OCP and CGL insurance policies to ensure adequate coverage against liability claims. While both policies serve different purposes, they are equally important to protect businesses and property owners from financial losses due to liability claims.

When purchasing insurance, it is crucial to work with an experienced insurance advisor who can help you understand your coverage needs and select the most appropriate policies for your business or personal circumstances. Don't hesitate to ask for help when navigating the complex world of insurance, as the right coverage can provide you with peace of mind and financial security.