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Board approves owner‑controlled insurance program, staff says it will cut insurance costs
Summary
The Authority approved an Owner‑Controlled Insurance Program covering $9.5 billion in contract value with a $200 million commercial general liability limit; staff projected roughly $45.4 million in OCIP cost versus $143 million under contractor‑provided insurance, estimating a 68% savings.
The board on June 24 approved an Owner‑Controlled Insurance Program (OCIP) that consolidates contractor commercial general liability coverage under a single Authority‑procured policy, staff said.
CFO Jamey Matalka told the board the proposed OCIP would provide a $200 million commercial general liability limit, a seven‑year term aligned with the master schedule and 10 years of completed‑operations coverage. He said the OCIP would cover about $9.5 billion in contract value for upcoming projects and estimated the initial OCIP cost at roughly $45.4 million versus an estimated historical cost of more than $143 million for contractor‑provided coverage.
Director Lynn Schenk asked whether the Authority had in‑house experience to manage the program. Matalka noted the Authority’s insurance manager, Kai Hong, formerly of Caltrans, is supporting the program and that the Authority would also use outside broker services. The board voted to approve the OCIP.
The motion carried by roll call vote; members voting in favor included Directors Schenk, Camacho, Elliott, Perea, Vice Chair Williams and Chair Kawa.
