Products & Completed Operations Insurance

What Does Products & Completed Operations Insurance Mean?

Products and Completed Operations Insurance is a type of liability policy that covers damage occurring after a project has been completed. Typically purchased by contractors, this policy protects them from financial claims made by third parties. It is usually sold as part of a broader general liability insurance policy rather than as a standalone product.

Insuranceopedia Explains Products & Completed Operations Insurance

Even after a contractor has completed a project, they may still be held liable for damages or injuries caused by the work. For instance, a cabinet they built might not be sturdy enough and could fall on someone, causing injury. Or a roof they installed might leak, resulting in property damage, even if the roof was built several months ago.

Situations like these highlight the importance of a Products and Completed Operations policy. This coverage allows the contractor to transfer the risk to the insurer if their previous project is involved in such an incident. The cost of carrying this coverage varies by trade and project size, which is one reason rates for general contractor insurance can differ widely from one business to another.