Completed operations is one of the most misunderstood coverages in commercial general liability. It covers claims that arise after a contractor or service business finishes their work — not during the job, but afterward. For contractors especially, completed operations can be the most important part of their GL coverage.
Completed operations liability covers bodily injury and property damage that occurs after the insured's work is finished — but that is caused by the work that was done. A plumber finishes a job, leaves, and a pipe they installed bursts six months later. A roofer completes a roof, and three years later water intrusion damages the client's interior. These are completed operations claims.
Ongoing operations coverage applies while the contractor is on the job site actively working. Completed operations coverage applies after they have left and the work is done. Both are part of a standard commercial GL policy — they just cover different time periods and different claims.
The ACORD 126 has a separate products-completed operations aggregate limit. This is different from the general aggregate. A standard CGL has a $2M general aggregate and a separate $2M products-completed operations aggregate. For contractors with significant completed operations exposure, underwriters may want a higher products-CO aggregate or may rate it separately.
Construction defect claims — leaking roofs, failed foundations, faulty plumbing, improper electrical — almost always come in years after the work is done. Without completed operations coverage, a contractor has no protection for these claims after their policy year ends. Many construction contracts also require the contractor to maintain completed operations coverage for several years after project completion.
For any contractor account, agents should ask: Are there any ongoing completed operations claims from prior work? What is the typical time between job completion and when a defect would be discovered? Does the client have any contracts that require them to maintain completed operations coverage for a specific period after project completion?
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