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sImagine you are a fire sprinkler installer and you use incorrect fittings to install sprinkler heads in an office building. Two years after the project is completed, the heads begin to leak and damage the drywall, carpeting, and computer equipment of a tenant. Your Completed Operations coverage will step in and pay for the claims on this property damage. However, the coverage will not pay to fix your defective work, leaving your company responsible for that bill.
Whether you are an Owner, General Contractor or a Trade Contractor, Completed Operations coverage is a key aspect of your General Liability to ensure that you are always protected, even after the job has finished.
What is Completed Operations Coverage?
Completed Operations is coverage that keeps you insured after the project has ended. It is a component of your General Liability policy, and it covers property damage and bodily injury claims. This coverage picks up your company’s exposure for work that was installed incorrectly, or otherwise defective, that gives rise to a property damage or bodily injury claim.
Who Needs It?
Completed Operations coverage can apply to anyone from a manufacturer to a construction contractor. On an OCIP, an Owner would want to have Completed Operations coverage as a component of their General Liability policy to ensure they are protected. The General Contractor might also want this coverage to ensure they are covered if the work completed by their trade contractors is faulty.
As a General Contractor, you also have to make sure that you are an additional insured on your subcontractor’s policies. As a Trade Contractor, you want to have Completed Operations coverage to protect you from a third-party liability arising from latent defects in your work.
Why is Completed Operations Coverage Important?
Completed Operations can help protect against a breach of contract and negligence claims. This coverage offers compensation for damages or injuries resulting from the contractor’s defective work or a manufacturer’s product. The Completed Operations Statute of Limitations is different in every state. You want to check how long you have to be covered for, depending on where your project was located.
If you have any additional questions regarding Completed Operations and their time periods or any other insurance policies, TSIB is ready to help! Give us a call at 201-267-7500.
