Owners and Contractors Protective Liability Insurance: Cost & Quotes From $69/mo

A recent report found that the cost of construction disputes dramatically increased in 2020. They went from $30 million in 2019 to $54 million in 2020. The commercial construction industry has also seen an increase in so-called “mega disputes,” which involve large private projects. These disputes happened despite an overall decrease of construction spending according to the Census Bureau.

Workplace injuries account for 21,400 nonfatal workplace injuries in 2021. The Center for Disease Control does not paint a much better picture, with construction fatalities outpacing employment growth for some worker groups.

In this environment in increased construction disputes, it is more important than ever to be protected from liability. Owner’s & contractors protective liability insurance is one tool that owners and general contractors have in their tool belts to protect themselves from excessive liability costs.

In this article, you will learn the answers to basic questions to make an informed decision about the best owners & contractors protective liability policy for you. These questions will include the following:

  • Definition of owners and contractors liability insurance

  • How the policy works

  • How much it costs

  • The best companies

What is Owner and Contractor’s Protective Liability Insurance?

Owners and contractors protective liability insurance is a stand-alone policy that helps cover project leads and general contractors from liabilities due to work done by contractors or subcontractors, often in the construction industry. 

As mentioned, this type of protective liability insurance is meant only to protect one party, which is usually the contractor or the owner. These insurance contracts are generally project specific, making them separate from any general liability coverage. An owner or contractor will still usually need to purchase additional types of insurance to operate a project while avoiding liability.


Differentiating Owner and Contractor’s Protective Liability, Railroad Protective Liability, Project Management Protective Liability, and Protective Professional Indemnity

Because owners & contractors’ protective liability coverage is a separate policy, it is often purchased in conjunction with other necessary insurance policies. Below is how owners protective liability coverage differs from other similar policies.

Policy How it Works How it Differs from OCP
Owner and Contractors Protective Liability (OCP) Bodily Injury and Property Damage liability from contractors or subcontractors N/A
Railroad Protective Liability (RPL) Railroads are riskier for typical contractor liability policies, so this policy fills in the gap in coverage from a regular policy. The Code of Federal Regulations requires that railroad projects include a railroad insurance protective liability insurance Broader coverage for railroad acts and omissions. Eliminates vicarious limits often in OCP from contractor workers
Project Management Protective Liability (PMPL) Remedies additional problems that can arise during specific projects not covered by OCP. There is no standard form and is tailored and applied on a per-project basis Emphasis on general supervision activities, which include preparing drawings and designs and taking control of subcontractor operations
Owners Protective Professional Indemnity (OPPI) Adds supplemental coverage for professional errors and omissions claims. Allows policyholders to exceed policy limits that can hold OCP insurance back

A construction worker holding a pipe on a construction site, protected by Contractors Protective Liability Insurance.

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How Does Owner and Contractor Protective Liability Insurance Work?

Owner contractor protective policy works by a contractor first purchasing OCP coverage. This policy then provides coverage to the project owner or general contractor named on the insurance contract. The coverage of owners contractors protective policy includes:

  • Bodily injury and property damage liability coverage for named insurers

  • Dedicated limits for the project owner or general contractors. Usual coverage amounts are $10 million for each occurrence though higher limits are available in the market

  • Legal defense expenses that may fall outside the policy limits

Benefits of Buying an OCP Liability Policy

The benefits of buying independent contractors protective liability is primarily for the project owner or general contractor overseeing the project. That person or company listed on the insurance policy is the one being provided the primary coverage. Owners protective liability insurance is an essential purchase to protect against possible excessive liabilities costs. The benefits of buying this policy are listed below.

  • Low risk of cancellation–Because OCP liability coverage is often project-specific, it is much easier to tailor it to the needs of the project. Owners and contractors protective liability policy cannot be canceled without advance notice given to the first-named insured and any designated contractors

  • Limits–OCP liability policy limits do not require named insured to share with additional insured because OCP is a separate insurance policy. This means you don’t have to share limits for the same occurrences as with other types of contractor liability policies, allowing project owners and general contractors more insurance coverage to use for themselves

  • Loss is usually not factored in future premiums–Another advantage of project-specific insurance is that any losses on liabilities are not usually factored into future premiums. This means even if you have many liabilities to cover on one project, they will not often translate to your insurance premiums on another project

  • Reduces disputes with insurance companies–OCP policies do not have to enter the fight for being the “primary policy,” which often leads to disputes between carriers. Each insurance company will want the other insurance company to be the primary policy to minimize what they have to pay out. OCP policies are, by default, the primary policy for owners and general contractors.

Will Owner and Contractor Protective Liability Coverage Replace an Existing General Liability Policy?

No, owner and contractor protective liability coverage will not replace any existing general liability policy. Owners & contractors protective liability insurance is a supplemental insurance that will exist on top of any existing general liability policies.

Owners protective liability policy places emphasis on protective owners and project managers first, so they don’t have to worry about sharing any insurance policy limits.


Application Requirements for Owner and Contractor Protective Liability Coverage

An owners and contractors protective liability coverage form often has application requirements that prospective buyers must satisfy. The requirements include the following:

  • Must currently have an existing construction general liability policy

  • Naming Insured and Project Owners Name

  • Defining project scope and construction costs

  • Having an audit contact for your worksite

  • Defining primary and excess limits

  • Filing additional details for multiple projects

  • Deciding the effective date of the coverage as well as the expiration date

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Cost of Owner and Contractor Protective Liability Insurance

The cost of owners protective liability coverage can start as low as $69 per month or $828 per year. Below is a comparison of some of the best policy providers and how much they cost monthly:

Company Cost per Month Cost per Year Best for
The Hartford $69 $828 Smooth application process
Travelers $88 $1,056 Claims specialization
BlueRock $99 $1,188 Expertise

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Best Owner and Contractor Protective Liability Insurance Companies 

Here are the best owner and contractor protective liability insurance companies. Read some of the reviews below to know their pros, cons, and average cost. 


The Hartford Owner and Contractor Protective Liability Insurance

Pros

  • Easy application to fill out

  • Tracking claims is simple

  • Small business playbook helps figure out what information you need

Cons

  • Quotes through agents

The Hartford is an excellently rated provider of owners contractors protective liability coverage. They have an A- (excellent) rating from AM Best. Their owner’s and contractor’s protective liability policy gives primary coverage to project owners and general contractors. They have an easy-to-download and fill-out application to pass along to your insurance agent or broker to get started on this extra coverage.

The company has been underwriting insurance policies for over 211 years. They had over $11 billion in direct premiums written in 2022 and provided policies for over one million small business clients. The Hartford is headquartered in Connecticut and employs approximately 18,100 people. They also ranked #160 in the Forbes 500 list of prestigious companies.

Best for: Smooth application process

Average cost: $69 per month 

Our rating: 10/10


Travelers Owner and Contractor Protective Liability Insurance

Pros

  • Specialized construction claim service to make claims less stressful

  • Proactive policy approach

  • Risk control

Cons

  • Requires an agent to purchase

Travelers Insurance has some excellent systems in place for construction insurance buyers. Their policies contain risk control policies that help you reduce the chance of workplace accidents at the worksite. They also have an entire claim service just for construction claims, which can often get contentious and challenging to resolve.

They boast an amazing A++(Superior) Rating from AM Best and have been in the business of insurance for over 165 years. They have over 30,000 employees and are the second-largest commercial insurance carrier in the US. Their insurance premiums brought in $35 billion in revenue in 2021.

Best for: Claim specialization

Average cost: $88 per month 

Our rating: 8/10


BlueRock Owner and Contractor Protective Liability Insurance

Pros

  • Policy experts

  • Tailored policies

Cons

  • Not an insurance provider

BlueRock offers competitive owner’s and contractor’s protective liability policy options through its multiple partners. They offer experts who can help you figure out the particulars of your project and to get covered more efficiently and quickly. Their OCP policy has more limitations compared to other competitors, not allowing excess coverage able to be purchased if you think you might exceed policy limits.

The BBB gives BlueRock an A+ for customer satisfaction. They are licensed in the states of New York, New Jersey, Connecticut, and Pennsylvania.

Best for: OCP coverage from multiple companies

Average cost: $99 per month 

Our rating: 6/10

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