Completed Operations Liability

Completed Operations Liability refers to the coverage that protects a business against claims for bodily injury or property damage that arise after a job is completed. It is a type of insurance included in General Liability Insurance policies.

Example #1

An example of Completed Operations Liability is when a contractor finishes building a house, and a few months later, a faulty electrical wiring job causes a fire. The insurance would cover the damages and legal fees if the homeowner sues for property damage.

Misuse

Misusing Completed Operations Liability can happen when a business fails to maintain proper records of completed projects or overlooks the importance of continued coverage. For instance, if a contractor mistakenly cancels their policy after completing a project and a claim arises later, they would be left unprotected and liable for all related costs.

Benefits

The benefit of Completed Operations Liability is that it provides financial protection to businesses beyond the completion of a project. For example, if a bakery finishes renovating its shop and a customer gets injured due to a loose floor tile a month later, the insurance would cover the medical expenses and any legal claims.

Conclusion

Completed Operations Liability is crucial for businesses to safeguard against unforeseen liabilities even after a project is finished. By ensuring continued coverage, businesses can protect themselves from substantial financial losses and legal actions.

Related Terms

General Liability InsuranceBusiness Owner's Policy (BOP)