Completed Operations
Insurance coverage that protects contractors and service providers from liability claims arising from their finished work after they've left the job site. This coverage addresses injuries or property damage that occur due to defects or problems in completed projects.
Example
“The roofing contractor's completed operations coverage paid for water damage to a homeowner's furniture when the roof developed leaks six months after installation.”
Memory Tip
Think 'Completed Operations = Coverage after Construction' - it covers problems that arise after your work is complete and you've left.
Why It Matters
Completed operations coverage protects businesses from potentially devastating liability claims that can arise years after finishing a project, when the original work site insurance no longer applies. Without this coverage, contractors and service providers remain personally liable for defects in their completed work. This protection is often required by contracts and helps maintain business viability when facing expensive liability claims.
Common Misconception
Many contractors think their general liability insurance automatically covers all completed work indefinitely, but standard policies often have time limitations or exclusions. Some believe completed operations only covers construction work, but it applies to any service business whose completed work could later cause injury or damage, including plumbers, electricians, and repair services.
In Practice
An electrical contractor installs wiring in a commercial building and completes the job in January. In June, faulty wiring causes a fire resulting in $75,000 in property damage and $25,000 in business interruption losses. The contractor's completed operations coverage, included in their $1 million general liability policy for an additional $400 annual premium, covers the $100,000 claim since the damage occurred after the electrical work was completed and the contractor had left the premises.
Etymology
The term evolved from construction and trade terminology, where 'completed' indicates finished work and 'operations' refers to business activities, reflecting coverage for liability after work activities are finished.
Common Misspellings
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