Owners and Contractors Protective Liability (OCP Insurance)

Construction projects involve multiple parties, shared responsibility, and complex liability exposure. When a project owner hires a general contractor, subcontractor, or independent contractor, the risk does not disappear simply because the work is outsourced. If something goes wrong at the job site, the project owner can still be held liable. This is where Owners and Contractors Protective Liability (OCP) insurance comes in.

Also known as contractors’ protective liability insurance or protective liability insurance, OCP insurance is designed to protect the project owner or general contractor from liability arising out of a contractor’s work on a specific project.

This guide explains what OCP insurance is, how it works in Canada, who needs it, and when it may be required.

What Is Owners and Contractors Protective Liability (OCP) Insurance?

Owners and Contractors Protective Liability (OCP) insurance is a stand-alone liability policy designed to protect a project owner or general contractor when bodily injury or property damage occurs as a result of a contractor’s operations on a specific project.

This type of insurance exists to address a common risk in the construction industry: even when work is performed by an independent contractor, the project owner or general contractor can still be held liable for incidents connected to that work. OCP insurance provides direct liability protection to the owner, rather than relying solely on the contractor’s insurance policies.

OCP insurance may provide coverage for claims involving:

• Bodily injury arising from a contractor’s work
• Property damage caused by contractor operations
• Certain claims related to the project owner’s acts of general supervision

Coverage applies only during the policy period and only at the job site listed in the policy.

How OCP Insurance Is Structured and Who It Protects

Unlike a contractor’s commercial general liability (CGL) policy, OCP insurance is structured very differently.

OCP coverage is:

• Project-specific, applying only to the designated job site
• Written for one party only, with dedicated coverage limits
• Intended to protect the named insured, not the contractor performing the work

In most cases, the named insured under an OCP policy is the project owner or general contractor. While the policy is usually purchased by a named contractor, such as a general contractor or subcontractor, it is purchased for the benefit of the project owner or general contractor, not the contractor who arranges it.

Because the coverage is separate from a contractor’s CGL policy, OCP insurance gives project owners greater control over liability protection and reduces reliance on additional insured endorsements.

At Leibel Insurance, OCP insurance is often recommended for projects where owners want dedicated coverage limits, clearer protection terms, and stronger risk management throughout the construction process.

Project-Specific Coverage and Policy Period Limitations

Contractors’ protective liability coverage is strictly project-focused, which is one of its defining features.

OCP coverage:

• Applies only to the job site listed on the declarations page
• Is limited to the policy period shown in the OCP policy
• Ends automatically on the project end date or when operations are completed

Once the contractor completes work at the site, coverage under the OCP policy stops. Claims that occur after completion or off the job site premises are not covered.

This job-specific structure is what distinguishes contractors’ protective OCP liability from broader insurance policies that follow a business across multiple projects.

What Owners and Contractors Protective Liability Insurance Does Not Cover

While OCP insurance provides valuable protection, its liability coverage is limited and intentionally narrow.

OCP insurance does not cover:

• Claims caused by the project owner’s negligence, unless related to acts of general supervision
• Claims unrelated to the contractor’s operations
• Claims involving professional errors or design omissions
• Claims occurring off the insured job site
• Claims arising after the contractor’s work is completed

Because of these exclusions, OCP insurance should never be used as a substitute for a commercial general liability policy.

Owners and Contractors Protective Liability (OCP) Insurance vs. Commercial General Liability (CGL)

Understanding the difference between Owners and Contractors Protective Liability (OCP) insurance and Commercial General Liability (CGL) insurance is essential when managing risk on a construction project. While both provide liability coverage, they are designed to protect different parties and respond to different types of exposure.

How Owners and Contractors Protective Liability (OCP) Insurance Works

An Owners and Contractors Protective Liability (OCP) insurance policy is a stand-alone policy that protects the property owner or general contractor from liability arising out of a designated contractor’s work on a specific project. Coverage applies only to claims connected to an independent contractor’s work at the insured job site.

OCP insurance is:

• Project-specific, applying only during the policy period
• Written for one insured party, usually the project owner
• Focused on vicarious liability related to a contractor’s acts or omissions
• Written on an occurrence basis
• Provides primary coverage with dedicated limits, without contribution from other insurance or the contractor’s Commercial General Liability policy

Coverage applies to contractor operations and, in limited cases, the insured’s acts of general supervision. It does not cover claims caused by the project owner’s negligence unless directly related to supervision of the contractor.

Because it is a standalone policy, OCP insurance is often required by contract to provide clear, project-focused protection.

How Commercial General Liability (CGL) Insurance Works

Commercial General Liability (CGL) insurance is designed to protect the contractor’s business, not the project owner. It provides broad liability coverage for bodily injury and property damage arising from the contractor’s ongoing operations.

Commercial General Liability insurance:

• Covers a contractor’s entire business operations across multiple projects
• Responds to claims arising from the contractor’s acts or omissions
• May extend limited protection to other parties through additional insured endorsements
• Shares policy limits across all projects, meaning limits can be reduced by unrelated claims

Because a CGL policy is not project-specific, coverage limits may be affected by losses from other job sites, which can reduce available protection for a particular project.

Why OCP and CGL Are Not Interchangeable

Owners and Contractors Protective Liability insurance is not a substitute for Commercial General Liability insurance. Instead, it is designed to supplement CGL coverage by addressing a specific risk faced by project owners.

In simple terms:

• OCP insurance is job-specific and offered on an occurrence basis.
• OCP insurance provides primary coverage for the project owner without contribution from the owner’s other insurance or the contractor’s general liability coverage.
• OCP insurance does not cover claims due to the project owner’s negligence unless related to the acts of general supervision of the contractor.
• Commercial General Liability insurance protects the contractor’s business
• Owners and Contractors Protective Liability insurance protects the project owner from liability connected to the contractor’s work

Using both together provides stronger risk management and clearer separation of responsibilities, ensuring each party has coverage designed for their specific exposure.

How the OCP Application Process Works

The OCP application is typically completed as part of the construction contract requirements. In most cases, the named contractor buys the OCP insurance policy on behalf of the project owner or general contractor, even though the contractor is not the insured party.

During the application process, key details must be provided, including:

• The specific job site and project description
• The policy period tied to the duration of work
• The identity of the named insured and the designated contractor

Because OCP insurance is project-specific, accuracy on the application is critical. Errors or omissions can affect whether coverage applies if a claim arises later. You can obtain your OCP insurance typically within 24 hours of applying.

How OCP Insurance Responds When a Claim Is Filed

OCP insurance applies only when there is a direct connection between the claim and the contractor’s work on the insured project. If a person is sued due to bodily injury or property damage arising from contractor operations, the OCP policy may respond to protect the named insured.

Coverage is triggered when:

• The claim arises from the contractor’s work
• The incident occurred at the listed job site
• The claim falls within the active policy period

When coverage applies, the OCP policy can help pay legal defence costs, settlements, or judgments, subject to policy limits and terms.

How OCP Insurance Helps Control Legal and Financial Costs

One of the main benefits of OCP insurance is cost protection for project owners. If a claim is brought against the owner due to contractor operations, legal defence and settlement costs can be significant.

Because OCP insurance provides primary coverage with dedicated limits, it helps:

• Protect the project owner from out-of-pocket expenses
• Reduce reliance on other insurance policies
• Limit financial exposure when claims arise

By transferring this risk through OCP insurance, project owners gain greater certainty and protection throughout the project lifecycle.

Owners and Contractors Protective Liability (OCP Insurance) – FAQs

Who qualifies as the named insured under an OCP policy?

The named insured under an OCP policy must be the project owner or general contractor and must own or be a tenant of the property where the work is being performed. If these conditions are not met, OCP coverage does not apply.

Is OCP insurance limited to a specific job site and timeframe?

Yes. OCP insurance is project-specific and only applies during the policy period and at the job site listed on the declarations page. Coverage ends when the project or contractor’s operations are completed.

How does OCP insurance differ from being an additional insured on a CGL policy?

OCP insurance gives project owners more control over policy terms and the claims process compared to additional insured status on a contractor’s CGL policy. OCP also provides dedicated limits and primary coverage, rather than shared limits under the contractor’s general liability insurance.

How long does OCP coverage protect the project owner?

OCP insurance provides coverage only for the duration of the project and only for liabilities connected to the contractor’s work during that time. Once the project is completed or the policy period ends, coverage no longer applies.