Relating to Nowruz Day; and declaring an emergency.

2025 Regular Session Introduced by Farrah Chaichi and 6 co-sponsors

Illinois authorizes an OCIP for state construction, procured via a broker, to cut costs and standardize coverage for prime and subcontractors.

Chapter 394, (2025 Laws): Effective date June 24, 2025.

Summary — HB 3768 (2025)

Status: Enacted (Chapter 394, 2025 Laws). Governor signed June 24, 2025. Effective date: June 24, 2025 (Act takes effect upon becoming law).

Note: The bill title in the provided header references “Nowruz Day,” but the enacted text and provisions add Article XLVIII to the Illinois Insurance Code establishing an Owner‑Controlled Insurance Program (OCIP). This summary describes the OCIP legislation as enacted.

Purpose

Authorize the Illinois Department of Insurance to establish an Owner‑Controlled Insurance Program (OCIP) by contracting with a private insurance broker, with the goals of:
- Reducing insurance cost barriers for contractors (especially small, minority‑, women‑, and disability‑owned businesses),
- Achieving economies of scale for the State on construction projects,
- Streamlining coverage and reducing inter‑carrier disputes,
- Promoting safer, more uniform jobsite safety and data collection.

Key provisions

Adds Article XLVIII to the Illinois Insurance Code (215 ILCS 5).

Department of Insurance authorized to contract with a private insurance broker to establish and administer an OCIP for State construction projects or groups of projects.

Required insurance types that an OCIP may provide (if applicable):

General and excess liability
Professional liability
Builders’ risk
Contractors’ pollution liability
Workers’ compensation
Cyber liability

Procurement: the Department must follow the Illinois Procurement Code when procuring the broker/OCIP contract.

Contract term: broker contract for providing an OCIP may not exceed 5 years.

Eligibility: all tiers of construction contractors and subcontractors are eligible to obtain OCIP coverage to satisfy insurance requirements for contracting with a construction agency.

Definitions: “Construction” excludes routine operation/repair/maintenance; “Construction agency” includes Capital Development Board, Department of Transportation, Toll Highway Authority, Central Management Services, public higher education institutions, and other State agencies that enter construction contracts.

Who is affected

State construction agencies and owners (State of Illinois)

Prime contractors and all tiers of subcontractors on covered projects

Private insurance brokers (through procurement opportunities)

Insurance carriers (shift in risk/coverage structure)

Potentially small, minority-, women-, and disability‑owned construction firms (intended beneficiaries)

Procedural / implementation notes

Department of Insurance is responsible for procuring and managing the OCIP arrangement under the Illinois Procurement Code.

The OCIP policy is intended to cover the owner and participating contractors for the life of a project or group of projects.

The Act became law and took effect immediately on June 24, 2025.

Potential impacts and considerations

May lower bidding barriers and insurance costs for smaller and disadvantaged contractors, increasing competition.

May reduce inter‑insurer disputes and improve unified safety standards and data tracking.

Could shift administrative and financial responsibilities to the State (implementation, oversight, and actuarial/premium considerations).

Fiscal impact depends on program design, scope of coverage, premium funding, and procurement outcomes. Agencies will need to design contracts and governance to manage risk, cost allocation, and continuity of coverage.