Products and Completed Operations Coverage

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What is Products and Completed Operations Coverage?

Products and Completed Operations Coverage is a section found in every Commercial General Liability Insurance policy. Still, many do not understand its significance. This insurance element is one that goes the extra mile in protecting contractors. By offering protection for claims of bodily injury and/or property damage resulting from a contractor's completed work, Products and Completed Operations Insurance can provide additional support and coverage to independent contractors.

The reality of being a sole proprietor or owner of a business is that there are many liabilities attached to providing products and services to the general public.

Read on to learn more about Products and Completed Operations Coverage.

Who Needs It?

Products and Completed Operations can apply to a variety of situations within the realm of bodily injury or property damage resulting from professional services. In many cases, services or products may prove to be hazardous to a client or individual after the initial commercial exchange.

These coverages can apply to anyone from a manufacturer of medicines to a construction contractor. Products and Completed Operations Insurance is an important means of ensuring that a third party can assume the financial, liability-related risks tied to a contractor’s completed work.

Why is it Necessary?

Products and Completed Operations Insurance can set the mind of any contractor at ease, facilitating their ability to navigate any claims while maintaining financial stability. The coverage applies directly to any damages or injuries that may result from the contractor’s work and usually means punitive damages can be settled quickly.

Let’s imagine that you own a family roofing business. Six months after tending to a client’s roof, the roof collapses into their kitchen and seriously injures your client while she is cooking dinner. After investigations, it is discovered that you failed to secure one of the roof beams correctly. The accident is therefore attributed to your negligence. Your ex-client brings a lawsuit against your business, and you submit a claim to your insurer.

Within the parameters of your Products and Completed Operations Coverage, your insurance company becomes responsible for legal defense and financial support resulting from this accident.

These protections can include replacement or repair of property if a contractor has inadequately completed his or her work. This can also apply to tending to defects in building materials or malfunctioning electrical systems. Some coverages may even protect against a contractor's failure to outline maintenance instructions or warnings to a client properly.

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Other Things to Consider

The Commercial General Liability (CGL) policy stipulates coverage only if bodily or property damage occurs during the policy period. These restrictions are important to keep in mind. If the above service-related injury happened even just one month after a CGL policy had been terminated, you would not have been covered for the damages resulting from the injury.

It is important to remember that, though Products and Completed Services Insurance has many important values, the coverage must already have been in effect at the time of the damaging incident.