CRIS CRIS Risk Financing & Insurance Programs

Question 1

What is an Owner-Controlled Insurance Program (OCIP) in construction?

Accepted Answer

A single insurance program procured by the owner covering all contractors on a project

Answer

An OCIP is a consolidated insurance program purchased and administered by the project owner to cover all enrolled contractors and subcontractors on a specific construction project.

Question 2

What distinguishes a Contractor-Controlled Insurance Program (CCIP) from an OCIP?

Accepted Answer

The CCIP is procured and administered by the general contractor rather than the owner

Answer

In a CCIP, the general contractor—rather than the project owner—purchases and manages the wrap-up insurance program covering enrolled parties.

Question 3

A construction firm retains the first $500,000 of each loss and purchases excess coverage above that level. This arrangement is best described as:

Accepted Answer

A large deductible program

Answer

A large deductible program requires the insured to reimburse the insurer for losses up to a specified per-occurrence deductible, shifting primary loss financing to the insured.

Question 4

Which risk financing technique involves a group of construction firms forming their own insurance company to cover their collective risks?

Accepted Answer

Group captive insurance

Answer

A group captive is a formal insurance company owned and controlled by multiple unrelated firms that pool their risks to gain underwriting profits and investment income.

Question 5

Under a retrospective rating plan, the final premium is calculated based on:

Accepted Answer

The insured's actual loss experience during the policy period

Answer

Retrospective rating adjusts the premium after the policy period ends using the insured's own losses, subject to minimum and maximum premium limits.

CRIS - Construction Risk and Insurance Specialist Practice Test

CRIS - Construction Risk and Insurance Specialist Practice Test

CRIS CRIS Risk Financing & Insurance Programs