1. Forms
2. CG
3. CG-00-09

What the Form Is

The CG 00 09, Owners and Contractors Protective Liability (OCP) Coverage Form, is a stand-alone insurance policy designed to protect a specific named insured (typically a property owner or a general contractor) from liability arising out of operations performed for them by a designated contractor at a specified location. It also provides coverage for the named insured's own acts or omissions but only in connection with their general supervision of the designated contractor's operations at that site. This coverage is for bodily injury and property damage only. A key feature is that while the designated contractor usually purchases the policy and pays the premium, the coverage is for the sole benefit of the named insured, who typically is the only party that can cancel it.

Classes of Business It Applies To

This form is primarily used in the construction industry for specific projects. It applies to situations where a property owner or a general contractor (the named insured) hires an independent contractor (the designated contractor) to perform work. Examples include:

• A real estate developer (named insured) hiring a general contractor to construct a new building. The general contractor would be the designated contractor.
• A general contractor (named insured) hiring a subcontractor (designated contractor) for a specialized part of a project, like electrical or plumbing work.
• Commercial or residential new construction, renovations, or tenant improvement projects.

Special Considerations

• Site and Operation Specific: Coverage is limited to the specific project site listed in the declarations and only for operations performed by the designated contractor named in the policy.
• No Completed Operations Coverage: The policy generally does not cover liability that arises after the designated contractor's work is completed and put to its intended use.
• Vicarious Liability Focus: A primary purpose is to cover the named insured's vicarious liability for the actions of the designated contractor. It also covers the named insured's liability for their negligent supervision of the contractor.
• Primary Coverage: The OCP policy usually provides primary coverage for the risks it insures, meaning it pays before other insurance the named insured might have for the same loss, provided the loss falls within the OCP's scope.
• Alternative to Additional Insured Status: It's often used as an alternative to naming the owner or general contractor as an additional insured on the designated contractor's Commercial General Liability (CGL) policy. The OCP provides dedicated limits of liability for the named insured and gives them more control over the coverage.
• Exclusions: It does not cover personal and advertising injury or medical payments (though it may cover first aid expenses administered at the time of an accident because it lacks a dedicated medical payments coverage section). Employees of the named insured are typically not considered insureds under this form for their own liability.

Key Information for Agents and Underwriters

• Risk Assessment: Underwriters should carefully evaluate the designated contractor's qualifications, experience, and safety record, as their actions are a primary source of potential liability for the named insured. The nature and hazards of the specific project are also critical.
• Premium Basis: The premium is typically based on the total cost of the work performed by the designated contractor for the specific project.
• Dedicated Limits: The form provides separate limits of insurance for the named insured, which are not shared with the contractor or eroded by claims against the contractor on their own policies.
• Control: The named insured (owner or GC) has direct control over this policy, as they are the named insured and typically the only party with cancellation rights, even if the contractor pays the premium. This can be a significant advantage over relying on additional insured status on a contractor's policy, which the contractor controls.
• Potential Gaps: Agents should advise clients that the CG 00 09 does not cover the named insured's own direct negligence (other than for their general supervision of the designated contractor's work). It also doesn't cover the designated contractor themselves; that contractor needs their own CGL policy. The lack of completed operations coverage is a significant limitation to be aware of.