What Is Completed Operations Liability?
In the course of doing business, companies that provide specific services such as construction, installation, or repair work, could potentially find themselves at the receiving end of lawsuits and claims. These could arise due to allegations of improper or defective workmanship.
Interestingly, the risk does not dissipate the moment the job is done and your team departs the site. It remains in effect long after you have left the location, assuming that it's a place distinct from your business premises, owned or rented. This lingering liability risk is a key point to understand and manage.
Commercial General Liability (CGL) insurance is designed to provide a layer of protection in such scenarios. It kicks in to cover any costs associated with bodily injury or property damage, caused by negligent or faulty workmanship by your business.
However, it's essential to know that while CGL covers the damage or injury caused by the fault, it won't cover the costs to replace or correct the defective work that caused the loss. Hence, it's crucial to understand the parameters of coverage to manage your risks better.
Claims under CGL must meet three main criteria for eligibility:
Nature of Claim: The claim should be based on the assertion that your business’s products or completed work has caused bodily injury or property damage.
Timeline: The incident leading to injury or property damage should have occurred after the product left your business location, or after the completion of the service at a location away from your business.
Link to your business: There should be a clear linkage between the injury or property damage claim and your business's products or services.
With a clear understanding of your exposure and the coverage provided by your CGL insurance policy, you can better mitigate your risks, protect your company, and limit your exposure.