WHEREAS, the transportation construction industry has a vital interest in the design, construction, maintenance and operation of the nation's transportation system, and;

WHEREAS, it is the goal of the transportation construction industry to deliver a safe, economical, environmentally-sound, and quality product to its customers, and;

WHEREAS, the management of a construction company and work site is ultimately responsible for placing its employees in as safe of an environment as possible. And a good safety record not only provides an obvious benefit to the employees, but also decreases costs and allows a company to be more competitive during the bidding process, and;

WHEREAS, owner controlled insurance programs (OCIPs) have been in existence for nearly thirty years for private projects and are now starting to be used for insuring large and small public sector projects that include turnpikes and highways; and;

WHEREAS, most OCIPs do not differentiate between safe and unsafe contractors with regard to the awarding of bids, and;

WHEREAS, OCIP third party administrators generally receive payment, regardless of the claims on a project, there exists no major incentive for these administrators to attempt to keep claims lower, and;

WHEREAS, in most OCIPs, the owner does not limit the contractor liability to the limits provided by the wrap-up insurance program, and;

WHEREAS, any effort to remove the contractor from the claims process, which occurs under OCIPs, will hinder the direct interaction between the contractor and an injured employee. This relationship is essential for both parties to understand the current status of an injury, claim, and timetable for the employee to return to work. Without this involvement by the contractor, the claims process will not be directly controlled and claim costs are sure to escalate, and;

WHEREAS, wrap-up programs often do not include important coverage such as professional liability, pollution liability or extended completed operations coverage etc., and;

WHEREAS, many insurance claims are not settled until as many as five years following the initial claim, which is often beyond the existing life of the owner controlled insurance program, and;

WHEREAS, contractors have the knowledge and experience to formulate safety management programs for their companies and projects, which OCIPs take away from contractors, and;

WHEREAS, use of OCIPs could increase the cost of construction for transportation construction projects.

NOW, THEREFORE, BE IT RESOLVED that ARTBA oppose the use of OCIPs on transportation construction projects, since such policies are not in the best interests of the contractor, the employees, the public owner, or the individual citizen.

Adopted March 30, 2001

Other ARTBA Policy Statements:

• Airports
• Highways
• Railroads
• Intermodal Transportation Safety
• Policy Resolution on Design-Build

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