February 19, 2026
By Daniel Brettler and Andrew Wagner
Over the next several years, a surge is expected in the construction of new domestic pharmaceutical manufacturing and research facilities, as well as major construction projects to renovate and expand existing U.S. pharmaceutical facilities. Among the key factors behind the rise in pharma company construction are increasing tariffs on imported goods by the federal government and the desire to have better controls over supply chains. Another factor contributing to the expected boom in domestic pharma construction is the opportunity to take advantage of FDA PreCheck, an initiative which cuts regulatory red tape for pharmaceuticals manufactured in the U.S.
While the long-term fiscal and operational advantages of U.S.-based manufacturing are evident, pharmaceutical companies need to find ways to maintain tight controls over construction-related costs and minimize the liability exposures inherent with large construction projects. For large construction and renovation projects with budgets of $100 million or above, an Owner Controlled Insurance Program can be an effective tool for achieving significant cost savings, reducing potential coverage gaps and mitigating liability exposures — all while giving pharma companies greater control.
What Are Owner Controlled Insurance Programs?
An Owner Controlled Insurance Program (OCIP) is a single insurance program designed to cover liability arising from large construction projects. Held and paid for by the property/business owner, OCIPs typically include key coverages such as general liability (including completed operations), workers’ compensation and excess liability. They can also be expanded to include coverages such as professional liability, pollution/environmental liability, etc. Coverage under an OCIP extends to all of the involved parties, including the owner, general contractor and all subcontractors — creating a streamlined, uniform approach that offers several key advantages.
How Do OCIPs Benefit Major Pharma Construction?
OCIPs offer significant advantages for large pharma construction projects with insurance budgets of $1 million and beyond. These advantages fall into two primary categories: cost savings and greater control.
Four Ways OCIPs Drive Cost Savings
- Savings through economies of scale: Securing coverages under one policy provides pharma companies with more purchasing power and the advantage of economies of scale that can support significantly improved pricing, better terms and higher coverage limits. And the savings, which would otherwise go to contractors as premium or contract expenses, are often substantial.
- Savings through higher deductibles: With deeper resources than general contractors and greater control over safety and risk control (outlined below), pharma companies can utilize contractor insurance credits to fund higher deductibles on the OCIP based on their own risk tolerance. Any unused deductibles under the OCIP go back to the owner, whereas unused deductibles under a contractor controlled insurance program (CCIP) go back to the general contractor to improve their bottom line.
- Savings through reduced litigation costs: Having all of the contractors and subcontractors covered under a single insurance contract eliminates questions and issues around who the negligent party is when a claim occurs, so the owner is not burdened with the time and expense of managing contractor vs. contractor litigation or subrogation issues.
- Savings through tax-advantaged funding: Owners typically utilize contractor insurance premium credits to fund deductibles for an OCIP program. When deductible premiums are funded through the owner’s captive insurance company, the tax benefits can be significant. Premiums associated with risks for third parties, such as contractors and subcontractors, are traditionally tax advantaged and viewed favorably by the IRS.
Greater Control in Three Key Areas
- Control over interior outfitting: The interior outfitting of a pharma facility can include specialized equipment general contractors don’t commonly handle. Due to the special nature of the equipment and the precision with which it must be installed, most owners prefer to purchase the equipment directly and have it installed by the manufacturer. An OCIP allows for such owner-controlled elements of the project to be covered where a CCIP does not.
- Control over safety, risk control and compliance: While general contractors manage site safety, they may not be well versed in the higher safety and regulatory requirements specific to pharma facility construction. An OCIP secured through a broker with construction safety, risk control and life science compliance expertise can deliver additional oversight and foster a safety and compliance culture that helps reduce injuries, lawsuits and fines.
- Control over contractor selection: An OCIP provides owners with more control over the selection of project contractors. For example, the owner may wish to engage with a minority enterprise for social or tax credit reasons, but the entity may not have sufficient insurance limits to qualify under a non-OCIP program. Under an OCIP, the owner can negotiate an exception with the insurer that would provide coverage for a preferred contractor.
Four Essentials to Look for in a Broker Partner
OCIPs have evolved and improved significantly over the last 10 to 15 years, so it is crucial to work with a broker that has kept up with the changes and has the right experience and resources to help you maximize the advantages of this approach, including:
- OCIP administration resources: Partnering with a broker that can deliver robust OCIP administration services is crucial because it lifts the majority of the administrative burden from owners and risk managers.
- Extensive OCIP experience: Working with a broker that has extensive experience in OCIPs and construction market alternatives is essential to secure the comprehensive coverage you need at the best possible terms.
- Dedicated life science team: Collaborating with a broker that has specialized life science expertise is vital to ensuring your OCIP coverage meets the unique needs of pharma manufacturing and research facilities.
- Deep bench of safety and risk control professionals: Teaming up with a broker that has dedicated in-house experts to help you promote a safety culture can lead to safer worksites and reduced liability exposures that translate to savings.
Partner With Us
Conner Strong & Buckelew has a proven track record of structuring OCIP solutions that enhance our clients’ protection while delivering millions in savings. Our seasoned life science and construction professionals understand the unique needs and requirements of pharmaceutical construction projects and will work with you to develop a customized OCIP for your project.
20% of our team is dedicated to safety, risk control and claims advocacy & consulting — including experts with 20+ years of experience who will work with the general contractor and your safety personnel to promote a safety culture and identify ways to mitigate risk.
Your Partner in Safety
Our safety and risk control team will be actively involved for the duration of your project, including:
- Attending pre-construction meetings
- Making routine site visits and visits for emergencies (i.e. injuries, weather events, labor issues, etc.)
- Supporting regulatory compliance, including OSHA visits
- Providing guidance on worker orientation and training
Superior Administration Support
Unlike most brokers, we can help support the administrative aspects of your OCIP through our owned affiliate company that specializes specifically in controlled insurance program administration — which means less heavy lifting for you and your risk manager.
Contact us to learn more about how we can deliver an OCIP solution tailored to the unique needs of pharmaceutical and life science organizations.
