LOS ANGELES UNIFIED SCHOOL DISTRICT

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1 LOS ANGELES UNIFIED SCHOOL DISTRICT Owner Controlled Insurance Program The School Repair and Construction Program Insurance Manual Insurance Manual September 26, 2007 OCIP II

2 Table of Contents Overview... 1 Definitions...2 OCIP Project Directory... 3 OCIP Administrators... 3 OCIP Owner... 4 OCIP Coverages... 5 Excluded Parties... 5 Evidence of Coverage... 5 Summary Description of OCIP Coverages... 5 Contractor and Subcontractor Required Coverage... 8 Workers Compensation and Employer s Liability... 9 Commercial General Liability/Umbrella Liability Automobile Liability Property Insurance Watercraft and Aircraft Liability Professional Liability Pollution Liability Contractor and Subcontractor Responsibilities Contractor Bids Adjustments for OCIP Insurance Costs Enrollment Maintaining Enrollment in the OCIP Safety Standards Payroll Reports Insurance Company Payroll Audit Change Order Procedures Demolition / Abatement Work Close Out and Audit Procedures Claim Reporting Procedures Workers Compensation Claims Liability Claims Automobile Claims Pollution Claims Builders Risk Claims Forms Insurance Manual September 26, 2007 OCIP II

3 OCIP PROJECT DIRECTORY Section 1 Overview Welcome to the LAUSD School Repair and Construction Program Owner Controlled Insurance Program. The 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 their 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 for operations of Enrolled Parties at the Project Site ( OCIP Coverages ). 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 for on-site activities 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 September 26, OCIP II 1

4 OCIP PROJECT DIRECTORY Definitions ELIGIBLE PARTIES: ENROLLED PARTIES, CONTRACTORS/ SUBCONTRACTORS: EXCLUDED PARTIES: Parties performing labor or services at the Project site are eligible to enroll in the OCIP unless 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 Confirmation Letter and Certificate of Insurance. 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. OCIP: PROGRAM ADMINISTRATOR: 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. Aon Risk Services, Inc. Insurance Manual September 26, OCIP II 2

5 OCIP PROJECT DIRECTORY Section 2 OCIP Project Directory The following list includes key insurance personnel involved in the OCIP. OCIP Administrators OVERALL PROGRAM ADMINISTRATION: Aon Risk Services, Inc. 707 Wilshire Boulevard, Suite 6000 Los Angeles, CA John Porter Program Manager Fred Mesa Program Administrator (Primary Contact for Enrollment, Payroll, Claim Kits, Forms, etc.) (213) (telephone) (213) (fax) (213) (telephone) (847) (fax) john_porter@ars.aon.com (866) (telephone) (800) (fax) acs_construction@ars.aon.com BUILDERS RISK PROGRAM ADMINISTRATION Driver Alliant Insurance Services 1301 Dove Street, Suite 200 Newport Beach, CA Claims Office: 600 Montgomery Street, 9 th Floor San Francisco, CA Julia Gossard-Gordon Account Manager Robert Frey Claims Manager (949) (telephone) (949) (fax) jgossard@driveralliant.com (415) (telephone) (415) (fax) rfrey@driveralliant.com Insurance Manual September 26, OCIP II 3

6 OCIP PROJECT DIRECTORY OCIP Owner Division of Risk Management & Insurance Services 333 South Beaudry Avenue, 28 th Floor Los Angeles, CA (213) (telephone) Steven La Shier Director of Risk Management Robert Reider OCIP Manager Jimmy Otero Acting Construction Safety Manager (Existing Construction Division) (213) (telephone) (213) (fax) (213) (telephone) (213) (fax) (213) (telephone) Chris Bartku Construction Safety Manager (New Construction Division) (213) (telephone) (213) (fax) Insurance Manual September 26, OCIP II 4

7 OCIP INSURANCE COVERAGE Section 3 OCIP Coverages This chapter provides a brief description of OCIP Coverages. You must refer to the actual policies for details concerning coverage, exclusions and limitations. Excluded Parties Excluded Parties must meet the insurance requirements established in Section 4 and provide evidence of coverage to the District. Evidence of Coverage Each Enrolled Party will be issued a Workers Compensation policy. 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 of whom will be a named insured on the OCIP policies. Complete copies of the insurance policies are available for your review in the OCIP Administrator's office Summary Description of OCIP Coverages The following descriptions on these pages provide a summary of OCIP insurance coverages ONLY. Contractors and Subcontractors should refer to the policies for actual terms, conditions, exclusions and limitations. Insurance Manual September 26, OCIP II 5

8 OCIP INSURANCE COVERAGE Each Enrolled Workers Compensation and Employers Liability: State California Party will be issued a separate Workers Compensation policy 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 Limits of Liability Shared by All Enrolled Parties A single policy will be issued covering 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. 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: 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 September 26, OCIP II 6

9 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 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 Contractor or Subcontractor Deductible - Each Loss $250,000 Aggregate Deductible $1,000,000 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 or leased equipment and materials. The OCIP will not cover Contractor or Subcontractor property. Insurance Manual September 26, OCIP II 7

10 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 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 or Excluded Parties. Enrolled Parties are to 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 per the insurance specifications in the Contract. See Section 2 for the definition of Enrolled Parties. Prime Contractors provide their Certificate of Insurance to Aon upon enrollment in the OCIP. Subcontractors provide their Certificates of Insurance to their Prime Contractor. See Section 7 for sample Certificate of Insurance Excluded Parties must provide evidence of Workers Compensation, General Liability, Excess/Umbrella Liability and Automobile Liability insurance for all activities including both on-site and off-site activities as per the insurance specifications in the Contract. See Section 2 for the definition of Excluded Parties. Prime Contractors and Subcontractors should provide their Certificates of Insurance to Nida Niravanh at LAUSD (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, prior to mobilization and within ten (10) Insurance Manual September 26, OCIP II 8

11 REQUIRED COVERAGES days of any renewal, change or replacement of coverage. A sample of an acceptable Certificate of Insurance is provided in Section 7. Contractor/Subcontractor will submit, adding LAUSD as an additional insured, General Liability/Workers' Compensation certificates of insurance for offsite/excluded work and Automobile Liability certificates of insurance for onsite/off-site/excluded work to: Division of Risk Management & Insurance Services 333 South Beaudry Avenue-28th Floor Los Angeles, CA Attention: Nida Niravanh Certificate of Insurance Within 5 days of Notice of Intent to Award, prior to mobilization and within ten (10) days of 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. Please note the requirements 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 noncontributing with respect to any other insurance available to the additional insureds. All Contractors and Subcontractors are responsible for monitoring their Enrolled Subcontractors and Excluded Parties Certificates of Insurance. The District reserves the right to disapprove the use of Subcontractors unable to meet the insurance requirements. Certificates of Insurance evidencing compliance are to be 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 and are not intended to 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 September 26, OCIP II 9

12 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: General Aggregate $2,000,000 Products/Completed Operations Aggregate $2,000,000 Personal/Advertising Injury Aggregate $1,000,000 Each Occurrence Limit $1,000,000 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 Subcontractors 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 and leased 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 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 property 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 naming 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. The District does not provide Professional Liability Insurance. Professional Liability All professional service firms must provide professional liability insurance Insurance Manual September 26, OCIP II 10

13 REQUIRED COVERAGES appropriate for their profession and satisfactory to the District. Pollution Liability Specifically excluded from OCIP coverage is Work related to the removal, remediation or abatement of hazardous materials, i.e., asbestos, lead, PCBs, heavy metals, etc. 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 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. 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 September 26, OCIP II 11

14 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. The 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, and the following: Safety Pre-Qualification prior to submitting a bid. Contractors may only contract with Subcontractors that they have safety pre-qualified Excluding the cost of OCIP insurance from their bids, if eligible for the OCIP Providing 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 Including OCIP provisions in all contracts with Subcontractors Providing 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 Notifying the OCIP Administrator of all subcontracts awarded Maintaining and reporting monthly payroll records Cooperating with the OCIP Administrator s requests for information Complying with insurance, claim and safety procedures Monitoring its Subcontractor's Certificates of Insurance Insurance Manual September 26, OCIP II 12

15 CONTRACTOR-RESPONSIBILITIES Notifying the OCIP Administrator immediately of any insurance cancellation, modification, material change or non renewal of Contractor required insurance Responsibilities of Subcontractors of all tiers: Enrollment in the OCIP, if eligible Safety pre-qualification Maintaining and reporting monthly payroll records Cooperating with the OCIP Administrator's requests for information Complying with insurance, claim and safety procedures Monitoring its Subcontractor's Certificates of Insurance 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 the cost of insurance and then 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 Coverage s 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). 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. 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. Insurance Manual September 26, OCIP II 13

16 CONTRACTOR-RESPONSIBILITIES 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 as a sample to assist the Contractor and Subcontractor in determining the cost of insurance to be deducted from the 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 to assist the Contractor in removing the insurance costs from their competitive bid. Do not include these worksheets with the bid submission. Each Enrolled Contractor and Enrolled Subcontractor may be required to submit insurance documentation that supports the Cost of OCIP Coverage s deducted from the bid. Documentation may include the following pages from the Workers Compensation, Employer s Liability, General Liability, Excess Liability, Builders Risk and Contractor s Pollution Liability (as applicable) policies: 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 Change orders must be priced by the Enrolled Parties to exclude the cost of insurance. Under the District s OCIP, the final payroll is determined by an audit by the OCIP insurer. The audited contract 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 Contractors are solely responsible for ensuring that their Subcontractors of all tiers also deduct the cost of insurance from their bid. amount will be withheld from the Contractor s payments under the Contract. See Section 7 for sample OCIP forms. Enrollment Each Enrolled Contractor shall provide details about its Subcontractors to the OCIP Administrator, in order to enroll them in the OCIP. The Contractor and Subcontractor must complete and submit the Enrollment Application form (Aon- 3); a sample is included in Section 7. This form must be completed and submitted to the OCIP Administrator within 10 working days of notice of intent to award contract award and prior to mobilization on the Site(s) to obtain coverage under the OCIP. Insurance Manual September 26, OCIP II 14

17 CONTRACTOR-RESPONSIBILITIES A separate Enrollment Application form (Aon-3) is required for each Eligible Subcontractor of any tier that performs Work at the Project Site. A separate Workers Compensation policy will be issued to each Enrolled Contractor and Enrolled Subcontractor. Each Enrolled Contractor or Enrolled Subcontractor will receive a Confirmation Letter. A Confirmation Letter is a letter issued by the OCIP Administrator that confirms acceptance of the applicant into the District OCIP. Note: Enrollment Is Not Automatic Enrollment into the OCIP is required, but not automatic. 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. 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). Note that OCIP coverage will cease 60 days after the date of Substantial Completion is reached on the project. 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 shall 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. Insurance Manual September 26, OCIP II 15

18 CONTRACTOR-RESPONSIBILITIES 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 supervisory and clerical personnel that are on-site and cover all 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 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 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 as well as being barred from future opportunities with the District. Insurance Manual September 26, OCIP II 16

19 CONTRACTOR-RESPONSIBILITIES Change Order Procedures 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 As respects to demolition on any structures of 4 (four) stories or greater in height, contractors should notify the Administrator (Aon) so that notification to Liberty Mutual can be made at least 4 (four) weeks in advance of the actual work beginning. Such notification shall 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 maintain a Pollution Liability Policy covering hazardous materials abatement. The contractor/subcontractor shall complete and submit the Certificate of Insurance for Hazardous Materials form as verification of insurance coverage for hazardous materials work. Demolition projects with no hazardous materials abatement or disturbances that may be performed by properly trained personnel according to Specification Sections and are fully covered by the OCIP. For demolition projects totaling above $1,000,000, or any project with hazardous materials abatement of more than 10% of total project costs, the contractor will be considered an Excluded Party for OCIP coverage. No portion of the project will be eligible for insurance coverage through the OCIP. Contractors will be required to provide evidence of Workers Compensation, General Liability, Excess/Umbrella Liability, Automobile Liability, and Pollution Liability insurance for all activities including both on-site and off-site activities as per the insurance specifications in the Contract. The Owner Authorized Representative (OAR) assigned to the project shall ensure that the appropriate insurance is maintained by the contractor for the duration of the project. Close Out and Audit Procedures The Enrolled Contractor and Enrolled Subcontractors must submit the Notice of Work Completion form (Aon-5), when a Contractor and/or a lower tier Insurance Manual September 26, OCIP II 17

20 CONTRACTOR-RESPONSIBILITIES Subcontractor has completed it s Work at the LAUSD School Repair and Construction Program Project Site (s) and no longer has workers on Site. The Note that OCIP coverage will cease 60 days after the date of Substantial Completion is reached on the project. Aon-5 form will initiate the final payroll report and audit of payroll and workerhours by the OCIP Insurer. The OCIP Insurer is the insurance company named on the policy or on the Certificate of Insurance that provides coverage for the OCIP. A copy of the Notice of Work Completion form, (Aon-5) with instructions on the proper method for completion is found in Section 7. Issuance of final payment will not be authorized by the District until all necessary forms have been submitted to the OCIP Administrator. Any Safety Program Contributions for which the Contractor or Subcontractor of any tier is responsible will be considered at the time of close-out. Safety Program Contributions previously paid will not be considered as a part of the close out. Insurance Manual September 26, OCIP II 18

21 CLAIM REPORTING PROCEDURES Section 6 Claim Reporting Procedures This section describes the basic procedures for reporting various types of claims: Workers Compensation, Liability, and Damage to the Project (Builders Risk). A Claims Kit will be provided to all Contractors. It will include details about claim reporting and is intended for use at the job site. Workers Compensation Claims The main responsibility for any Contractor and Subcontractor is first to see that the injured worker receives immediate medical care. Next, you should immediately notify the OCIP Insurance Carrier in the event of a serious injury or accident. To assist you in reporting an injury or accident, we have established a dedicated toll free telephone number. Please immediately report any injury using the toll free telephone number: You may report your WC First Reports of Injury 24 hours a day/365 days per year. When calling in you will need to know the project/school name, address, contractor, contract number, and contractor s policy number. When you report the Workers Compensation injury using the special reporting telephone number, the OCIP Insurance Carrier will complete the Employer's First Report of Injury (form 5020) and make the necessary filings. It is the employer's responsibility to provide the injured worker with the Employee's Claim (form DWC-1) within 24 hours of employer s knowledge of injury. The employer must also send a copy of the employee's claim form and the Supervisor's Report of Injury form to the OCIP Insurance Carrier. The OCIP Administrator will provide Claims Kits to all Enrolled Contractors and Enrolled Subcontractors. These kits will include appropriate claim forms and postings. Additional kits or claims forms can be obtained from the OCIP Administrator or the carrier s claims coordinator. Also attached to this manual is the MPN notice. This Notice must be given to each employee to review and then must be signed for knowledge of receipt. Insurance Manual September 26, OCIP II 19

22 CLAIM REPORTING PROCEDURES The District s Workers Compensation insurer has arranged with authorized medical providers and facilities for treatment of all minor or non-life threatening injuries. The name, address and telephone number of the nearest authorized clinic and hospital for the designated school location will be on the Posting Notice, which is in the Claims Kit. The posting notice was also sent to you at the time Aon Risk Services advised you of the completion of the enrollment. Contractors and Subcontractors must designate a representative at the site to take injured employees to the medical treatment center and to report the claim. This individual is to remain with the injured employee at the medical treatment center while he/she is being treated. The treating physician should provide a written description of whether or not the injured employee can return to work, a list of restrictions if any, and the estimated length of time the injured worker must be on modified duty. The District supports transitional modified work to keep injured workers gainfully employed during recovery. The General Contractor will arrange with the local 911 emergency ambulance services for response to any serious traumatic life threatening injuries and will provide information in the Claims Kit. Report all Liability claims to Liberty Mutual. Liability Claims Accidents at or around the Project Site(s) resulting in damage to property of others (other than your own work product), or personal injury or death to a student, faculty member or a member of the public, must be reported immediately to Liberty Mutual by calling the toll free telephone number: Do not voluntarily admit liability. Cooperate with the District and the OCIP insurer representatives in the accident investigation. Report all Auto claims to your insurance carrier and the OCIP Administrator. Automobile Claims No insurance coverage is provided for automobile accidents under the OCIP. It is the sole responsibility of each Contractor and Subcontractor to report accidents/claims involving their automobiles to their own insurers. However, all accidents occurring in or around the job site must be reported to the OCIP Administrator. The accident will be investigated to determine any liability arising out of the project construction activities that could result in future claims (i.e., due to the conditions of the roads, etc.). Each Contractor and Subcontractor shall cooperate in the investigation of all automobile accidents. Insurance Manual September 26, OCIP II 20

23 CLAIM REPORTING PROCEDURES Pollution Claims The District's OCIP policies may provide coverage for certain pollution conditions. Incidents must be reported promptly in writing. Report incidents or possible claims by immediately notifying the OCIP Administrator of any known or suspected pollution incidents. Builders Risk Claims All risk of direct physical loss or damage excluding earthquake and flood is subject to policy terms, conditions and exclusions. Driver Alliant is the broker for the Builders Risk program. To report claims contact: Claims Manager Robert Frey (415) (telephone) Driver Alliant Claims Office: (415) (fax) 600 Montgomery Street, 9 th Floor rfrey@driveralliant.com San Francisco, CA Insurance Manual September 26, OCIP II 21

24 FORMS Section 7 Forms This section contains the forms needed for enrolling into the OCIP, reporting claims, reporting payroll and overall administration of the OCIP. This section contains the following forms: Aon 1 Aon 2 Aon 3 Aon 4 Aon 5 Aon 6 Exhibit 1 Exhibit 2 Exhibit 3 Exhibit 4 Exhibit 5 Insurance Credit Worksheet Insurance Summary Enrollment Application On-Site Payroll Report Notice of Work Completion On-site Worker Hours Incident Report Sample Certificate of Insurance Workers Compensation First Report of Injury or Illness General Liability Notice of Occurrence/Claim Property Loss Notice Liberty Mutual Medical Provider Network Information Note: For assistance in completing these forms, please contact the LAUSD OCIP Administrator Aon Risk Services (866) Insurance Manual September 26, OCIP II 22

25 Form-1 INSURANCE CREDIT WORKSHEET (Instructions located on the following page) LAUSD Page 1 of 1 1. Contractor Information: Federal ID No.: Company Name & dba / Contact Name & Title: Address: City, State Zip Code: Telephone: Fax: u Business Information (headquarters) u Contact Information (address questions to..) 2. Bid Information: Scope of Work: Bid Package No.: Proposed Contract Price: $ Amount of Self Performed Work: $ Are you a: Contractor If Subcontractor, Subcontractor identify under contract with: Workers Compensation Insurance Information: 3. State Class Code 4. Description 5. Rate (per $100 payroll) 6. Worker-hours WC Premium Payroll (Payroll * Rate / 100) Totals Your Company s Workers Compensation Experience Modifier: 11. Modified Premium (Total WC Premium multiplied by line 10): 12. a) Employers Liability Rate: b) Employers Liability Cost = line 11 x line 12a: 13. a) Modification Premium Factors: Modifier 1: Modifier 2: b) Rate c) Amount d)total Modified Amount: 14. Total Workers Compensation Premium (line 11 plus 12 minus 13): 15. a) General Liab. Rate: b) Based On: c) Rate factor: Payroll Per $100 GL Premium Receipts Per $1,000 Other Cost: 16. a) Builder s Risk/Installation Floater Rate: b) Property Premium Costs: Not applicable 17. a) Excess/Umbrella Rate: b) Based On: c) Rate factor: Payroll Per $100 Receipts Per $1,000 Excess/Umbrella Other Premium Costs: d) Total of all Insurance Premiums (total of lines 14, 15, 16 & 17): Overhead & Profit on Insurance Prem. %: O/H & Profit Amount: 20. Total Initial Insurance Credit (Total of lines 18 &19): 21. Initial Insurance Composite Rate (line 20 divided by total payroll in line 9): Name: Title: (please print) Date: Signature:

26 INSTRUCTIONS FOR INSURANCE CREDIT WORKSHEET (AON FORM-1) A separate form may be used for each contractor, known Subcontractor and trade not currently awarded to a Subcontractor. This form may be used to estimate the cost of insurance, which must be deducted from the bid. Duplicate this form as needed: 1. Contractor Information: Provide your company's Federal ID Number. Provide your Business Information including the Company Name, Address, City, State, Zip Code, Telephone and Fax in the column. Provide the name of your employee that can answer insurance questions. If this person s Business Address, Telephone and Fax is different enter this information in the column provided. 2. Bid Information: Provide the Bid Package Number assigned by District. Provide a brief description of the work your firm will perform. Identify your proposed contract price. Identify the amount your firm will self-perform (100% if no subcontractors are used) Check the box that applies to your status on this bid. Identify with whom you are contracting (the District or the name of the contractor or subcontractor) Workers Compensation Insurance Information: Description of Worker s Compensation Column Information 3. State Class Code Provide the state Workers Compensation classification codes applicable to your scope of work. 4. Description Provide the Workers Compensation class code description that applies to the code. 5. Rate Enter the rate your firm pays for coverage for each class code. This information can be obtained from your Workers Compensation policy. 6. Worker-hours Provide your estimated worker-hours, by class code, for work that will be performed on-site. 7. Payroll Provide your estimated payroll, by class code, for work that will be performed on-site. 8. WC Premium For each classification you entered, multiply the Payroll by the Rate and divide by Totals Calculate totals for columns numbered 8, 9 and Workers Compensation Experience Modifier - Enter your experience modification factor. This number is located on your Workers Compensation policy or on the Bureau s rating sheets. If you do not have an experience modifier, use Modified Premium Multiply the total on line 9 by your Workers Compensation experience modifier. 12. Employers Liability Rate (a) Enter your Employers Liability Rate located on your Workers Compensation policy and (b) calculate by multiplying the Modified Premium by the rate. 13. Modification Premium Factors Identify the premium modification factors that apply to your Workers Compensation policy. These factors may include a Scheduled Credit or a Premium Discount. a) Identify the name of the Modifier, (b) enter the Rate, (c) compute the Amount by calculating the Modified Premium by the Rate. Total the amount computed in column 13.c). Enter the total in 13.d). 14. Total Workers Compensation Premium Add the Modified Premium and the Employers Liability Premium (line 11 and 12). Subtract the Premium Modifications identified and totaled in line 13 d). Other Insurance Items: 15. General Liability (a) Enter the General Liability rate, (b) identify the basis the rate applies to by checking the box (if the basis is other, identify in the space provided), (c) Check whether the rate factor is ($100 or $1,000). Compute the General Liability Premium by using the formula (rate basis * rate / rate factor). 16. Builder s Risk/Installation Floater (a) Enter the rate and (b) apply to the Proposed Contract Cost identified in the Bid Information Section. 17. Excess/Umbrella Liability (a) Enter your Excess or Umbrella Liability rate, (b) identify the basis the rate applies to by checking the box (if the basis is other, identify in the space provided), (c) Check whether the rate factor is $100 or $1,000. Compute the Excess or Umbrella Liability Premium by using the formula (rate basis * rate / rate factor). Total Insurance Premiums: 18. Total of all Insurance Premiums Add lines 14, 15, 16 and Overhead & Profit (a) Identify the percentage of Overhead & Profit included in your pricing structure, (b) apply the percentage to Overhead & Profit to the Total of all Insurance Premiums. 20. Total Initial Insurance Credit Add lines 18 and Initial Insurance Composite Rate - Divide the Total Initial Insurance Credit (line 20) by the Total Payroll (column 9).

27 Form-2 INSURANCE SUMMARY LAUSD Page 1 of 1 1. Name of Contractor: 2. Bid Package No.: 3. Total Proposed Cost: $ Contracting Parties & Trades Aon Form-1 Reference No. 4. Contractor : A B C D Estimated Estimated Payroll Initial Insurance Amount of Contract Worker-hours Credit List Additional Trades NOT yet assigned to a sub (attach separate Aon Form 1 5. Your Known Subcontractors (Attach a Separate Aon Form-1 from each) 7. TOTAL ESTIMATES FOR 7a 7b 7c 7d 8. Composite Rate for Contract: (line 7d divided by line 7c * 100)

28 INSTRUCTIONS FOR INSURANCE SUMMARY (AON FORM-2) Make a separate entry on the Aon Form-2 for each contractor, known Subcontractor and trade not currently awarded to a Subcontractor. Duplicate this form as needed: General Information 1. Name of Contractor Enter the name of the Contractor or Subcontractor that is being summarized on the form. 2. Bid Package No. Enter the Bid Package No. the District assigned to the bid. 3. Proposed Contract Cost Enter the Proposed Contract Cost for the Contractor or Subcontractor being summarized. Contractor Specific Information 4. Contractor Enter the Contractor or Subcontract that is being summarized (include only self-performed work from the Aon Form-1) b) Estimated Worker-hours (line 9 and column ) c) Estimated Payroll (line 9 and column ) d) Initial Insurance Credit line 21). 5. Known Subcontractors For each Subcontractor summarize their work and the work of lower level tiers. Information will be obtained from either an Insurance Summary Aon Form-2, if lower level tiers were used, or the Aon Form-1. The Aon Form-1 reference numbers are supplied below: a) Amount of Contract The Proposed Contract Cost from Bid Information Section (2). b) Estimated Worker-hours The work performed by the Subcontractor and all lower level subcontractors. Information from line 9 and column 6. c) Estimated Payroll The work performed by the Subcontractor and all lower level subcontractors. Information from line 9 and column.7 d) Initial Insurance Credit The work performed by the Subcontractor and all lower level tiers. Information obtained from line Identified Trades NOT yet assigned to a Subcontractor For each trade, not yet assigned to a Subcontractor, estimate the amount of work and insurance costs on Aon Form-1s. a) Amount of Contract The Estimated cost to subcontract the work. Information is obtained from the Proposed Contract Cost from Bid Information Section (2). b) Estimated Worker-hours The estimated on-site trade worker-hours. Information from line 9 and column 6. c) Estimated Payroll The estimated on-site trade payroll. Information from line 9 and column 7. Initial Insurance Credit the computed insurance costs for the trade based on estimated subcontract cost, including Contract Amount, Worker-hours and Payroll. The OCIP Administrator is available to provide reasonable insurance rates for computing the insurance costs on the Aon Form-1. Information obtained from line Total Estimates for Contract The total amount entered in column a, b, c, and d. 8. Composite Rate for Contract The Total Initial Insurance Credit divided by the Total Estimated Payroll (line 7d / 7c).

29 Form-3 ENROLLMENT APPLICATION LAUSD (Instructions located on the following page) Page 1 of 2 It is suggested that you examine your current Workers Compensation and General Liability Policies or contact your Insurance Agent to assist you with completing this form. *** NOTICE *** Enrollment is not automatic and requires the satisfactory completion of the Aon Form-3. In addition, you must submit a Certificate of Insurance providing evidence of your off-site coverages and automobile liability insurance. Please refer to the Insurance Manual & Safety Standards for coverage requirements. 1. Contractor Information: Federal ID No. u Business Information (headquarters) u Contact Information (address questions to ) Company Name & dba / Contact Name & Title: Address: City, State Zip Code: Telephone: Fax: Address: Entity: Sole Proprietor Corporation Partnership Other: 2. Provide your current Workers Compensation Information: Anniversary Rating Date: Experience Modification: Bureau File Number: Your WC Insurance Carrier: Policy #: Effective Date: Expiration Date: 3. Contract Information: Contract #: Contract Description: Prime Location of Work: Status on Project: Subcontractor If you are a Sub, Identify Contract Award Date: who your contract is with: Provide Payroll by Class Code in the following space provided (attach a separate sheet if necessary) Sub Subcontractor Other Class State Description Worker-hours Payroll Code Contacts: Totals Position Name & Title Phone Fax e.mail address Project Mngr: Safety Rep: Residnt Engnr: Contract Admin: Payroll: Claims: Start Date: Actual Estimated Completion Date: Actual Estimated Contract Amount: