Which approach is correct?

Colorado Subscriber

A

In this case, your approach is correct. Your client should obtain a separate general liability policy on the surrounding land. An OCP policy only applies to: 1) bodily injury or property damage that arises from operations performed for the named insured by a contractor at the location specified in the policy; or 2) the named insured's supervision of construction operations. The wording limits the coverage to damages arising from construction activities only. In addition to the restrictions on coverage that are included in the insuring agreement, the OCP policy also excludes coverage for “acts or omissions by you [the named insured] and your employees.” This exclusion shores up the insuring agreement's requirement that covered damages arise from either actual construction or general supervision of the construction activities.

Since the land in question is separated from the construction site by a fence, there is little questioning that it is not a part of the construction area. Therefore, liability coverage on it is not provided by the OCP policy.

Another important point to keep in mind is that, while an OCP policy may provide broader coverage than a CGL policy for a construction site in certain ways, it is much more limited than a CGL in other ways. An example of this is the fact that an OCP policy does not provide any personal injury coverage, which is available on the standard CGL form.