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1 LOS ANGELES UNIFIED SCHOOL DISTRICT Owner Controlled Insurance Program The School Repair and Construction Program Insurance Manual Insurance Manual Version 7.0 January 5, OCIP II

2 Table of Contents Section 1. Overview... 1 Definitions... 2 Section 2. OCIP Project Directory... 4 OCIP Program Administrators... 4 OCIP Owner... 5 Section 3. OCIP Coverages... 6 Excluded Parties... 6 Evidence of Coverage... 6 Summary Description of OCIP Coverages... 6 Section 4. Contractor and Subcontractor Required Coverage... 9 Workers Compensation and Employer s Liability Commercial General Liability/Umbrella Liability Automobile Liability Property Insurance Watercraft and Aircraft Liability Professional Liability Pollution Liability Section 5. Contractor and Subcontractor Responsibilities Contractor Bids Adjustments for OCIP Insurance Costs Enrollment Medical Provider Network (MPN) Requirements Maintaining Enrollment in the OCIP Safety Standards Payroll Reports Insurance Company Payroll Audit Change Order Procedures Demolition / Abatement Work Crane Work Close Out and Audit Procedures Section 6. Claim Reporting Procedures Workers Compensation Claims General Liability Claims Automobile Liability Claims Pollution Liability Claims Builders Risk Claims Section 7. Forms Insurance Manual Version 7.0 January 5, OCIP II

3 OCIP PROJECT DIRECTORY Section 1 Overview Welcome to the (LAUSD) School Repair and Construction Program Owner Controlled Insurance Program. LAUSD has arranged for its construction projects to be insured under its Owner Controlled Insurance Program (OCIP). An OCIP is a single insurance program that insures the District, the Board, all Enrolled Contractors and Enrolled Subcontractors, and other designated parties for Work performed at the Project Site(s). Certain Contractors and Subcontractors are excluded from this OCIP. These parties are identified in Section 3 of this Manual. Coverage under the OCIP includes Workers Compensation, Employer s Liability, General Liability, Excess Liability, Builders Risk, and Contractor's Pollution Liability Insurance ( OCIP Coverages ) for operations of Enrolled Parties at the Project Site. The District will pay the insurance premiums for the OCIP coverages described in this Manual. You should notify your insurance broker/insurer(s) of the coverages provided under this OCIP to avoid the duplication of coverage. Each bidder is required to EXCLUDE from its bid price the cost of the OCIP Coverages provided by the District. The Contractor's and Subcontractor's cost of insurance would include the reduction in insurance premiums, related taxes and assessments, markup on the insurance premiums and losses retained through the use of a self-funded program, self-insured retention or deductible program. The total cost of insurance must include expected losses within any retained risk. The Contractor must deduct the cost of insurance for all their Subcontractors from the bid in addition to their own cost of insurance. DISCLAIMER: The information in this Manual is intended to outline the OCIP. If any conflict exists between this Manual and the OCIP insurance policies the insurance policies will govern. Insurance Manual Version 7.0 January 5, OCIP II 1

4 OCIP PROJECT DIRECTORY Definitions ELIGIBLE PARTIES: ENROLLED PARTIES, CONTRACTORS/ SUBCONTRACTORS: EXCLUDED PARTIES: OCIP: OCIP INSURER: PROGRAM ADMINISTRATOR: Parties performing labor or services at the Project site are eligible to enroll in the OCIP unless they are an Excluded Party. Those eligible Contractors and Subcontractors that have submitted all necessary enrollment information and have been accepted into the OCIP as evidenced by a LAUSD OCIP Confirmation Letter and LAUSD OCIP Certificate of Insurance provided by Aon. Excluded Parties : (a) Hazardous materials remediation, removal and/or transport companies and their consultants; (b) Architects, surveyors, engineers, and soil testing engineers, and their consultants; (c) Vendors, suppliers, fabricators, material dealers, truckers, haulers, drivers and others who merely transport, pickup, deliver, or carry materials, personnel, parts or equipment or any other items or persons to or from the Project site; (d) Contractors and each of their respective Subcontractors who do not perform any actual labor on the Project site, during the term of the Contract; (e) Any parties or entities not specifically designated by in its sole discretion, even if otherwise eligible. (f) All crane operators and crane operations. LAUSD s Owner Controlled Insurance Program - A coordinated insurance program providing certain coverages, as defined herein, for the District, Eligible and Enrolled Contractors, and Eligible and Enrolled Subcontractors performing Work at the Project Site. The insurance company named on the policy or on the Certificate of Insurance that provides coverage for the OCIP. Aon Risk Services, Inc. Insurance Manual Version 7.0 January 5, OCIP II 2

5 OCIP PROJECT DIRECTORY Insurance Manual Version 7.0 January 5, OCIP II 3

6 OCIP PROJECT DIRECTORY Section 2 OCIP Project Directory The following list includes key insurance personnel involved in the LAUSD OCIP. OCIP Program Administrators OVERALL PROGRAM ADMINISTRATION: Aon Risk Services, Inc. 707 Wilshire Boulevard, Suite 2600 Los Angeles, CA Jim Holobaugh Program Director Paula Guglielmino Program Manager Administration Services: Fred Mesa Program Administrator (Primary Contact for Enrollment, Payroll, Claim Kits, Forms, etc.) Victoria Gotch-Mesa Program Supervisor (213) (office) (213) (direct) (847) (fax) (213) (office) (213) (direct) (312) (fax) (866) (office) (847) (direct) (800) (fax) (866) (office) (847) (direct) (800) (fax) Insurance Manual Version 7.0 January 5, OCIP II 4

7 OCIP PROJECT DIRECTORY BUILDERS RISK PROGRAM ADMINISTRATION: Alliant Insurance Services Administration Services: Julia Gordon Account Executive (949) (office) (949) (fax) Claims Services: Robert Frey Claims Manager (415) (office) (415) (fax) OCIP Owner Division of Risk Management & Insurance Services 333 South Beaudry Avenue, 28 th Floor Los Angeles, CA Robert Reider Director of Risk Finance and Insurance Services Aristeo Aguilera OCIP Manager Linda Bayless OCIP Claims Supervisor Jimmy Otero Construction Safety Director (Existing Facilities Division) David Livingston Construction Safety Director (New Construction Division) (213) (office) (213) (fax) (213) (office) (213) (fax) (213) (office) (213) (fax) (213) (office) (213) (cell) (213) (fax) (213) (office) (213) (cell) (213) (fax) Insurance Manual Version 7.0 January 5, OCIP II 5

8 OCIP INSURANCE COVERAGE Section 3 OCIP Coverages This chapter provides a brief description of OCIP Coverages. The actual policies dictate coverage. Excluded Parties Excluded Parties must meet the insurance requirements established in Section 4 and provide evidence of coverage to the District. Evidence of Coverage The OCIP Administrator will provide a Certificate of Insurance evidencing Workers Compensation, General Liability, Excess Liability, Builders Risk, and Contractor s Pollution Liability insurance to each Enrolled Contractor and Enrolled Subcontractor. Each Party enrolled for Workers Compensation coverage will be issued their own Workers Compensation policy listing them as the Named Insured. Enrolled Contractors and Enrolled Subcontractors will be an Additional Insured on the other OCIP policies as those policies provide. Summary Description of OCIP Coverages The following descriptions on these pages provide a summary of OCIP insurance coverages ONLY. Contractors and Subcontractors may review the policies for actual terms, conditions, exclusions and limitations. Insurance Manual Version 7.0 January 5, OCIP II 6

9 OCIP INSURANCE COVERAGE Each Enrolled Party will be issued an individual Workers Compensation policy Workers Compensation and Employers Liability: State California Part One Workers Compensation: Statutory Limit Part Two Employer s Liability: Annual Limits per Enrolled Party Bodily Injury by Accident, each accident $2,000,000 Bodily Injury by Disease, each employee $2,000,000 Bodily Injury by Disease, policy limit $2,000,000 Commercial General Liability Coverage Form: Occurrence A single policy exists covering all Enrolled Parties. Limits of Liability Shared by All Enrolled Parties General Aggregate $4,000,000 Products/Completed Operations Aggregate $4,000,000 Bodily Injury & Property Damage Each Occurrence $2,000,000 Personal/Advertising Injury Each Occurrence $2,000,000 Fire Damage Legal Liability $1,000,000 Medical Expense $5,000 This insurance will NOT provide coverage for products liability to any insured party, vendor, supplier, off-site fabricator, material dealer or other party for any product manufactured, assembled or otherwise worked upon away from the Project Site. The General Aggregate reinstates on an annual basis. Ten (10) Years Products & Completed Operations Extension beyond final acceptance of the entire project with a single, non-reinstated aggregate limit. The policy contains exclusions. Some of these exclusions are: Off-site exposures, Real & Personal Property in the care, custody or control of the insured; Asbestos; Lead; Discrimination & Wrongful Termination; ERISA; Architects & Engineers Errors & Omissions; Owned & Non-Owned Aircraft, Watercraft, Pollution and Automobile Liability; Nuclear Broad Form Liability, Terrorism. Excess Liability Shared by All Enrolled Parties Each Occurrence Limit $100,000,000 Annual General Aggregate Limit $100,000,000 Insurance Manual Version 7.0 January 5, OCIP II 7

10 OCIP INSURANCE COVERAGE Policy follows form of underlying Commercial General Liability and Employer s Liability policy wording (provisions, coverage, exclusions, etc.). Builders Risk Projects under $50 Million Each Occurrence Limit $50,000,000 Contractor or Subcontractor Deductible - Each Loss $10,000 All projects in excess of $50 million in construction value must be submitted for individual underwriting prior to binding coverage. Contractor s Pollution Liability Shared by All Enrolled Parties Each Occurrence Limit $50,000,000 Annual General Aggregate Limit $50,000,000 NOTE: Insurance coverage and limits provided under the OCIP are limited in scope and are specific to Work performed after the inception date of your enrollment into this OCIP. Your insurance representative should review this information. Any additional coverage you may wish to purchase will be at your option and expense. NOTE: Contractors and Subcontractors are advised to arrange their own insurance for Contractor or Subcontractor owned, used, leased or rented equipment and materials. The OCIP will not cover Contractor or Subcontractor property. Insurance Manual Version 7.0 January 5, OCIP II 8

11 REQUIRED COVERAGES Section 4 Contractor and Subcontractor Required Coverage Contractors and all Subcontractors are required to maintain coverage to protect against losses that occur away from the Project Site or that are otherwise not covered under the OCIP. Contractors and Subcontractors are required to maintain insurance coverage for the duration of the Contract(s) that protects the District from liabilities. These liabilities may arise from the Contractor s and Subcontractor s operations performed away from the Project site, from coverages not provided by the OCIP, or from operations performed by Excluded Parties. The OCIP places Contractors and Subcontractors into one of two main categories: Enrolled Parties and Excluded Parties. See Section 7 for sample Certificate of Insurance Enrolled Parties must provide evidence of Workers Compensation, General Liability, and Excess/Umbrella Liability insurance for off-site activities and Automobile Liability insurance for both on-site and off-site activities as specified in the Contract. See Section 2 for the definition of Enrolled Parties. Prime Contractors must provide their Certificate of Insurance to Aon upon enrollment in the OCIP. Subcontractors must provide their Certificates of Insurance to their Prime Contractor. Excluded Parties must provide evidence of Workers Compensation, General Liability, Excess/Umbrella Liability, Automobile Liability and Pollution Liability insurance for all activities including both on-site and offsite activities as per the insurance specifications in the Contract. See Section 2 for the definition of Excluded Parties. Prime Contractors and Subcontractors must provide their Certificates of Insurance to LAUSD attn: Larry Chatman (see below). All Prime Contractors must submit verification of insurance in the form of a Certificate of Insurance on a standard ACORD form 25-S. They must provide verification of insurance to the OCIP Administrator within ten (10) working days of Notice of Intent to Award of contract, and at least thirty (30) days prior to any Insurance Manual Version 7.0 January 5, OCIP II 9

12 REQUIRED COVERAGES renewal, change or replacement of coverage. A sample of an acceptable Certificate of Insurance is provided in Section 7. Certificate of Insurance Within ten (10) days of Notice of Intent to Award, prior to mobilization and at least thirty (30) days prior to renewal, change or replacement of coverage, Prime Contractors will submit a Certificate of Insurance to Aon evidencing the coverage and limits as specified in this section. A 30-day notice of cancellation provision and additional insured status is required on all Certificates. Excluded Prime Contractors and all excluded Subcontractors must submit Certificates of Insurance for off-site/excluded work for General Liability and Workers Compensation and on-site/off-site/excluded work for Automobile Liability. LAUSD must be added as an Additional Insured to the General Liability and Automobile Liability and a Waiver of Subrogation in favor of LAUSD must apply to all lines of coverage, including Workers' Compensation. Certificates must be sent to: Division of Risk Management & Insurance Services 333 South Beaudry Avenue-28th Floor Los Angeles, CA Attention: Larry Chatman Please note the requirement for thirty (30) days notice of cancellation, modification or material change. The Additional Insured endorsement shall state that the coverage provided to the Additional Insureds is Primary and Non- Contributory with respect to any other insurance available to the Additional Insureds. All Contractors and Subcontractors are responsible for monitoring their Enrolled Subcontractors Certificates of Insurance whether they are enrolled or not. The District reserves the right to disapprove the use of Subcontractors unable to meet the insurance requirements. Certificates of Insurance evidencing compliance must be made available to the District or the OCIP Administrator upon request. The limits of liability shown for the insurance required of the Contractors and Subcontractors are minimum limits only. They in no way limit or restrict the liability imposed on the Contractors and Subcontractors for Work performed under their Contract. Eligible Contractors shall provide evidence of Workers Compensation insurance for off-site activities. Excluded Parties shall provide evidence of Workers Compensation applicable to on and off-site projects. Workers Compensation and Employer s Liability Part One - Workers Compensation: Statutory Limit Part Two -Employer s Liability: Annual Limits: Bodily Injury by Accident, each accident $1,000,000 Bodily Injury by Disease, each employee $1,000,000 Bodily Injury by Disease, policy limit $1,000,000 Insurance Manual Version 7.0 January 5, OCIP II 10

13 REQUIRED COVERAGES Eligible Contractors shall provide evidence of general liability insurance for off-site activities. Excluded Parties shall provide evidence of general liability insurance applicable to on and off-site projects and must add the District and other parties as Additional Insureds to their policy. All Contractors and Subcontractors shall provide evidence of automobile liability. The OCIP does not cover automobile liability. Commercial General Liability/Umbrella Liability Annual Limits: Each Occurrence Limit $1,000,000 Personal/Advertising Injury Limit $1,000,000 General Aggregate $2,000,000 Products/Completed Operations Aggregate $2,000,000 Coverage must be an Occurrence form and it must apply to bodily injury and property damage for operations (including explosion, collapse and underground coverage), independent contractors, products and completed operations. Limits can be provided by a combination of a primary Commercial General Liability policy and an Excess or Umbrella Liability policy. Automobile Liability A Commercial Business Auto Policy which covers all owned, hired and nonowned automobiles, trucks and trailers with coverage limits not less than $1,000,000 Combined Single Limit each accident for bodily injury and property damage. Coverage will apply both on and away from the Project Site(s). All contractors shall be required to maintain limits of not less than $1,000,000 Combined Single Limit. Property Insurance Contractors and Subcontractors are advised to arrange their own insurance for owned, used, leased or rented equipment, whether such equipment is located at a Project Site or in transit. Contractors and Subcontractors are solely responsible for any loss or damage to their personal property and property not intended for incorporation into the structure including contractor tools and equipment, scaffolding and temporary structures, whether owned, used, leased or rented by the contractor. Contractors and Subcontractors are also responsible for any loss or damage to any off-site property and/or materials created or provided under the Contract. Watercraft and Aircraft Liability The operator of any watercraft or aircraft of any kind must maintain liability insurance with limits of at least $5,000,000 that names the District and the respective Contractor and/or Subcontractor as an Additional Insured with Primary and Non-Contributory wording. In addition, the limit of liability must be satisfactory to the District. Such insurance requirements will be determined as the need arises. Insurance Manual Version 7.0 January 5, OCIP II 11

14 REQUIRED COVERAGES The District does not provide Professional Liability Insurance. Professional Liability All professional service firms must provide professional liability insurance appropriate for their profession and satisfactory to the District. Pollution Liability Work related to the removal, remediation or abatement of hazardous materials, i.e., asbestos, lead, PCBs, heavy metals, specified demolition, etc. is specifically excluded from OCIP coverage. Contractors/subcontractors performing this type of work must provide and maintain a Pollution Liability Policy covering the exposures mentioned above. The District will determine limits based on the nature of the contract and the risk involved. Note: Waivers of Subrogation Required The Contractor's Workers Compensation, General Liability, Automobile Liability and Umbrella or Excess Liability insurers shall provide Waivers of Subrogation in favor of the District and other designated parties. Note: Additional Insured Endorsements Required The Contractor's General Liability and Excess Liability Insurance policies will name the District, the Board, its officials, employees and agents and the OCIP Administrator as Additional Insureds and it will state that the coverage is Primary and Non-Contributory. Insurance Manual Version 7.0 January 5, OCIP II 12

15 CONTRACTOR-RESPONSIBILITIES Section 5 Contractor and Subcontractor Responsibilities Throughout the course of the Project(s), Contractors and Subcontractors will be responsible for reporting and maintaining certain records as outlined in this section. Contractors and Subcontractors are required to cooperate with the District and its OCIP Administrator in all aspects of OCIP implementation and administration. Responsibilities of the Contractor include all contract responsibilities, including but not limited to the following: Safety Pre-Qualification prior to submitting a bid. Contractors may only contract with Subcontractors that they have safety pre-qualified EXCLUDE the cost of OCIP insurance from their bids, if eligible for the OCIP Provide each Subcontractor with a copy of this Insurance Manual & Safety Standards Enrollment in the OCIP, if eligible, within ten (10) working days of Notice of Intent to Award of Contract Include OCIP provisions in all contracts with Subcontractors Provide timely evidence of other insurance or contractor required insurance to the OCIP Administrator within ten (10) working days of notice of intent to award of contract Notify the OCIP Administrator of all subcontracts awarded Maintain and report monthly payroll records Cooperate with the OCIP Administrator s and/or the OCIP Manager s requests for information Comply with insurance, claim and safety procedures Monitor and maintain its Subcontractors Certificates of Insurance on-site Insurance Manual Version 7.0 January 5, OCIP II 13

16 CONTRACTOR-RESPONSIBILITIES Notify the OCIP Administrator immediately of any insurance cancellation, modification, material change or non-renewal of Contractor required insurance - and - Ensure that their own eligible and enrolled subcontractors EXCLUDE the cost of OCIP insurance from their bids. Responsibilities of Subcontractors of all tiers: Safety pre-qualification Enrollment in the OCIP, if eligible, within ten (10) working days of the Notice of Intent to Award and prior to mobilization on-site Maintain and report monthly payroll records Cooperate with the OCIP Administrator's and/or OCIP Manager s requests for information Comply with insurance, claim and safety procedures Monitor and maintain its Subcontractor's Certificates of Insurance on-site See Section 7 for sample forms that can help identify your insurance costs. See Section 2 for information on contacting the OCIP Administrator. Contractor Bids The District provides insurance for all Enrolled Contractors and Enrolled Subcontractors under the OCIP for Work performed at the Project Site(s). The section below, Adjustments for OCIP Insurance Costs describes the procedure for bidding and how you must identify and EXCLUDE your insurance costs from the bid. Section 7 of this Manual contains worksheets that can help you estimate your insurance costs for this Project. The OCIP Administrator can also assist you in identifying the insurance costs. Adjustments for OCIP Insurance Costs Each Contractor and Subcontractor is required to EXCLUDE the Costs of OCIP Coverages from its bid price for the proposed scope of work (including subcontracted work whether or not the Subcontractor is identified at the time of the bid). Change orders must also be priced by the Enrolled Parties to EXCLUDE the cost of insurance. Costs of OCIP Coverages is defined as the amount of Contractor s and its Subcontractors reduction in insurance costs due to eligibility for OCIP Coverages as determined by the Owner using Aon Form-1 and Aon Form-2 located in the Insurance Manual and information available to the District and/or the OCIP Administrator regarding the costs of similar coverages taking into account limits of liability, coverages, and rating of the insurer. Insurance Manual Version 7.0 January 5, OCIP II 14

17 CONTRACTOR-RESPONSIBILITIES The Contractor's and Subcontractor's cost of insurance would include the reduction in insurance premiums, related taxes and assessments, markup on the insurance premiums and losses retained through the use of a self-funded program, self-insured retention or deductible program. The total cost of insurance must include expected losses within any retained risk. The Contractor must DEDUCT the cost of insurance for all their Subcontractors from the bid in addition to their own cost of insurance. To aid the Contractor and its Subcontractors in identifying its Workers Compensation, Employer s Liability insurance, General Liability insurance, Excess Liability insurance, Builders Risk insurance and Contractor s Pollution Liability insurance costs, the Insurance Credit Worksheet form (Aon-1) is included in Section 7. Contractors and Subcontractors should use this worksheet to determine the costs of insurance to be DEDUCTED from their bid. A separate form can be used for the Contractor s self-performed work, each identified Subcontractor, and for unidentified Subcontractors at the time of the bid. The worksheets are for assistance only. Contractors should maintain these on file but do not include these worksheets with the bid submission or OCIP enrollment documents. However, each Enrolled Contractor and Enrolled Subcontractor may be required to submit insurance documentation that supports the Cost of OCIP Coverage deducted from the bid. Documentation must include the following pages from the Workers Compensation, Employer s Liability, General Liability, Excess Liability, Builders Risk and Contractor s Pollution Liability policies as applicable: Declarations or information page Rate page(s) Deductible endorsements Verification of experience modification (Workers Compensation only) 5 Years of loss history for entities that retain losses Under the District s OCIP, final payroll is determined by an audit by the OCIP insurer. The audited payroll information will be used to calculate the Contractor s and Subcontractor s true insurance costs (in the absence of the OCIP). If the results of this comparison demonstrate that the final, actual payrolls would have produced a DIFFERENT DEDUCTION for insurance costs, AN ADDITIONAL AMOUNT WILL BE WITHHELD from the Contractor s payments under the Contract. Contractors are solely responsible for ensuring that their Subcontractors of all tiers also DEDUCT the cost of insurance from their bid. Insurance Manual Version 7.0 January 5, OCIP II 15

18 CONTRACTOR-RESPONSIBILITIES See Section 7 for sample OCIP forms. Enrollment Each Enrolled Contractor shall provide details about themselves and their Subcontractors to the OCIP Administrator in order to enroll them in the OCIP. The Contractor and Subcontractor must each complete and submit the Aon-3 Enrollment Application form included in Section 7 of this manual for each and every contract, even if they already have another contract enrolled on the same project. Restated, a separate Enrollment Application form (Aon-3) is required for each contract for Eligible Subcontractors of any tier that performs Work under the OCIP. This form must be completed and submitted to the OCIP Administrator within ten (10) working days of Notice of Intent to Award Contract to obtain coverage under the OCIP. Failure to do so will result in the Contractor being barred from entering the Project Site(s). Each Enrolled Contractor and Enrolled Subcontractor will receive an OCIP Confirmation Letter. An OCIP Confirmation Letter is a letter issued by the OCIP Administrator (Aon) that confirms acceptance of the applicant into the LAUSD OCIP and includes a Certificate of Insurance evidencing coverage. In addition, a separate Workers Compensation policy (if applicable) will be issued to each Enrolled Contractor and Enrolled Subcontractor enrolling in the OCIP for the first time. Contractors with an existing Workers Compensation policy under the LAUSD OCIP will receive an endorsement adding the new contract to the existing policy following submission of the Aon-3 Enrollment Application form to the OCIP Administrator (Aon). NOTE: EACH CONTRACT MUST BE ENROLLED INTO THE OCIP Enrollment into the OCIP is not automatic. Every contract must be enrolled separately. All Eligible Contractors and all Eligible Subcontractors must complete the enrollment forms and participate in the enrollment process for OCIP coverage to apply. Access to the Project Site will not be permitted until Enrollment into the OCIP is complete. Medical Provider Network (MPN) Requirements Attached to this manual is the Medical Provider Network (MPN) notice and the MPN Form-B. The MPN is a network of authorized medical providers and facilities arranged by the OCIP s Workers Compensation Insurance Carrier (Liberty Mutual) to treat all minor and non-life threatening injuries. The LAUSD OCIP requires Enrolled Contractors and Subcontractors of every tier MUST give the MPN Form-B to each employee and obtain their signature on the Form-B prior to the employee starting work. The Form-B s Insurance Manual Version 7.0 January 5, OCIP II 16

19 CONTRACTOR-RESPONSIBILITIES should be maintained on-site. In the event of a worker injury, notify the OCIP Insurance Carrier that you have a signed MPN Form-B on file for that injured worker and send them a copy as per their directions. The MPN notice and MPN Form-B is Exhibit 5 to this Insurance Manual. Maintaining Enrollment in the OCIP If you do not comply with all the terms of this Manual in a timely manner, including the Construction Safety Standards, you may not remain enrolled in the OCIP. Contractors eligible for enrollment in the OCIP who are not enrolled in the OCIP will not be granted access to the Project Site(s). Safety Standards establish minimum standards for contractor safety programs. Safety Standards are provided to all participants during the bidding process. Safety Standards Each Contractor and Subcontractor is required to have a written safety program and to provide a designated safety representative who is on Site when any Work is in progress. If there are fifty (50) workers or more on a job-site, the Contractor must have a DEDICATED, FULL-TIME, Safety Representative that has no other tasks other than administering the Contractor s and LAUSD s Safety Programs. Safety Representative Requirements are as specified in the contract and LAUSD Safety Program. Minimum standards for Contractor safety programs are outlined in the LAUSD s Safety Standards. Payroll Reports Each Enrolled Contractor and Enrolled Subcontractor of every tier must submit monthly payroll reports. The reports will identify worker-hours and payroll by Workers Compensation classification code for all Work performed at the Project Site. This information will be used to provide the District's insurers with information required for determining the District's premium. All Enrolled Contractors and Enrolled Subcontractors must submit payroll reports prior to the 10 th of the following month. A Payroll Report form (Aon Form-4), provided in Section 7, is the only acceptable form. The monthly worker-hour and payroll reports should include all on-site workers. Supervisory and clerical personnel payroll should also be included provided that it occurred on-site and covered only Work performed at or emanating directly from each Project Site. The payroll report (Aon Form-4) for the prime contractor and all subcontractors must be submitted with the contractors request for payment. The District will not process payment requests unless the Aon Form-4 payroll report is attached. Insurance Manual Version 7.0 January 5, OCIP II 17

20 CONTRACTOR-RESPONSIBILITIES Insurance Company Payroll Audit Each Enrolled Contractor and Enrolled Subcontractor is required to maintain payroll records for each Contract. Such records will allocate the payroll by Workers Compensation classification(s) code and exclude the excess or premium paid for overtime (i.e., only the straight time rate will apply to overtime hours worked). Furthermore, such records will limit the payroll for Executive Officers and Partners/Sole Proprietors to the limitations as stated in the State of California manual rules. It is important that you properly classify payrolls, as these are reported to the rating bureau for promulgation of future Experience Modifiers for your firm. All Enrolled Contractors and Enrolled Subcontractors shall make available their payroll records, vouchers, contracts, documents, and records, of any and all kinds, to the auditors of the OCIP insurer(s) or the District s representatives. Availability of records must be for the policy period, any extension, or during a final audit period as required by the insurance policies. Note: Failure to submit the payroll reports as required may result in the withholding of contract progress payments or final payment until the reports are received and may also result in being barred from future opportunities with the District. Change Order Procedures As mentioned above, change orders must also EXCLUDE the Enrolled Contractor's Costs of OCIP Coverage for the insurance coverages that are provided by the District in the OCIP. Demolition / Abatement Work Regardless of contract amount, Contractors must notify the OCIP Administrator (Aon) of any demolition on any structures of four (4) stories or greater in height at least 4 (four) weeks in advance of the actual work beginning. This is so the OCIP Administrator can notify Liberty Mutual. Such notification will give Liberty Mutual Loss Prevention the option to participate in the review, pre-planning and monitoring process for the demolition work. For demolition projects totaling $1,000,000 or less, or projects with hazardous materials abatement of 10% or less of the total project costs, OCIP coverage will extend to all portions of work except for hazardous materials abatement. Contractors/subcontractors performing this type of work must provide and Insurance Manual Version 7.0 January 5, OCIP II 18

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