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Who Takes Primary Insurance Liability: OCP or CGL?

John ShahidiVerified
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Summary：Who takes primary insurance liability? OCP and CGL policies both cover liability claims, but OCP is primary over CGL for claims arising from contractor's work, while CGL is excess over OCP for additional insured. Choosing the right coverage is crucial.

Primary Insurance Liability: OCP or CGL?

When it comes to insurance liability, it can be confusing to determine who takes primary responsibility between an Owners and Contractors Protective Liability (OCP) policy and a Commercial General Liability (CGL) policy. Both policies are designed to coverliability claims, but they have different purposes and coverages.

Understanding OCP Policies

OCP policies are typically purchased by contractors who are working on behalf of property owners. The policy provides coverage for the contractor's liability for bodily injury or property damage that occurs during the course of their work. It also covers the property owner's liability for claims that arise from the contractor's work.

The OCP policy is considered primary over the property owner's CGL policy. This means that if a claim is filed against both policies, the OCP policy will be responsible for paying the claim first. If the OCP policy limit is exhausted, then the CGL policy will kick in to cover any remaining costs.

Understanding CGL Policies

CGL policies are designed to provide broad coverage for a variety of liability claims, including bodily injury and property damage. The policy is typically purchased by businesses to cover their liability risks. It also covers the liability of additional insureds, such as vendors or subcontractors.

In most cases, CGL policies are excess over any other primary insurance policies, including OCP policies. This means that if a claim is filed against both policies, the OCP policy will be responsible for paying the claim first. If the OCP policy limit is exhausted, then the CGL policy will only kick in to cover any remaining costs.

Choosing the Right Coverage

When it comes to determining which policy to purchase, it's important to consider the specific needs of your business. If you are a contractor working on behalf of property owners, an OCP policy may be the best option to ensure that both you and the property owner are covered in the event of a liability claim. On the other hand, if you are a business owner looking for broad coverage for your liability risks, a CGL policy may be the better choice.

It's also important to work with an experienced insurance agent who can help you understand the nuances of each policy and ensure that you have the right coverage in place to protect your business.

Insurance and Financial Planning

Insurance is one of the most important components of a comprehensive financial plan. It can help protect your family and your business from unexpected events and provide peace of mind knowing that you are covered in case of a claim.

When it comes to personal insurance, it's important to consider your specific needs and risks. This could include coverage for your home, vehicles, and personal liability. Working with an experienced insurance agent can help ensure that you have the right coverage in place to protect your assets.

For business owners, it's important to consider the risks associated with your industry and operations. This could include liability risks, property damage, and business interruption. An insurance agent can help you understand your risks and recommend the right coverage options to protect your business.

In conclusion, understanding theprimary insurance liabilitybetween OCP and CGL policies is important to ensure that you have the right coverage in place to protect your business and assets. Working with an experienced insurance agent can help ensure that you have the right coverage in place to meet your specific needs.

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primary insurance liabilityOCP policyCGL policyliability claimsinsurance coverage
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