The Pros and Cons of CIPs

SANTA ANA, Calif., February 20, 2015—With the growing popularity of the controlled insurance program (CIP), recommends that contractors carefully consider some of the intricacies of this type of coverage.

  • Because CIP can involve multiple participants, a loss on someone else’s project could result in the reduction—or even the depletion—of your insurance coverage on a master program that shares limits.
  • Be sure you know whether the CIP covers only the general contractor and owner, or the general contractor, owner, and all subcontractors.
  • Be informed about the exclusions attached to the policy, and how they could impact you.
  • Understand how insurance costs are accounted for in billing and bidding.
  • Determine how repair and warranty work will be covered after the project is completed.
  • Understand how deductibles are allocated among CIP participants.

CIPs can be very useful in responding to concerns about the availability of coverage and adequacy of coverage limits, and because of their ability to lock in coverage and cost. But there is the potential for coverage gaps and other issues to arise. If you have questions about appropriate California contractors insurance, contact us. is a service of Insurance Partners, Inc., which has been providing quality protection for contractors for more than 35 years. California contractors insurance specialists work with companies on everything from California general liability and California workers compensation insurance to contractor bonds and a “pay as you sell” liability insurance program designed especially for homebuilders. If you have questions about your contractor insurance coverage, contact us.

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