Completed Operations

Completed operations coverage, a part of general liability insurance, provides protection for a business against claims resulting from work completed in the past that has led to property damage or bodily injury. It covers legal fees, settlements, and judgments related to such claims.

Example #1

A construction company completes a building project. A few months later, a part of the structure collapses, causing injuries to occupants. Completed operations coverage would help cover the costs of legal defense and potential settlements in this situation.

Misuse

Misuse of completed operations coverage could involve a company attempting to claim for incidents that occurred after the policy coverage period has ended. This could potentially lead to fraudulent claims and financial loss for the insurer, impacting other policyholders and the overall integrity of the insurance system. It is crucial to protect against misuse to maintain fairness and prevent increased premiums for all insured parties.

Benefits

The benefit of completed operations coverage is that it shields businesses from unforeseen liabilities that may arise long after a project is completed. It offers financial protection against claims that may come to light well after the work is done, providing peace of mind and financial security.

Conclusion

Completed operations coverage in general liability insurance is a crucial safeguard for businesses, especially in industries where the impact of completed work may not be immediately apparent. By understanding its purpose and ensuring it is used ethically and appropriately, businesses can protect themselves and maintain a fair marketplace for all stakeholders.

Related Terms

General Liability InsuranceClaimCoverage