What is a Completed-Operation Liability?
When insuring your business, you’ll need commercial general liability (CGL) insurance. This coverage will protect you against numerous scenarios where your mistakes or negligence might accidentally harm others. Even when this harm was unintentional, you might still have a responsibility to pay the recovery costs of the affected person. Liability insurance will help you do so.
General liability insurance will usually contain coverage for several types of third-party losses. One of these is completed-operations liabilities. Completed-operations liabilities are unique because they don’t necessarily exist while you are doing your work. Instead, they arise after the work is done.
What many business owners fail to realize is that their work can impact people long after they finish direct services. Therefore, they will need liability coverage for the risks that exist after they think they have finished their work. It is completed operations liability insurance that will provide this benefit.
Let’s take a closer look at this unique coverage.
Completed Operations Liability Coverage in CGL Insurance
A completed-operations liability is a liability that exists after you finish your work for a client. Even after you have done your job, a client might still sustain harm as a result of a mistake on your part. Completed-operations liability insurance often applies to service providers for this reason.
For example, if you are an electrician, then you might visit someone’s home to install new light fixtures in their dining room. While everything might seem fine when you finish the work and leave the house, a hidden threat might lurk in a piece of wiring that you failed to attach properly. A fire might break out, cause considerable property damage and in a worst-case scenario even burn one of the residents.
As a result, the customer might blame you for their losses. They could sue your business for thousands of dollars. Even if you didn’t intend for the fire to occur in the first place, even if the faulty wiring was a simple oversight on your part, you still have to respond.
With the benefit of completed-operations liability insurance, you can compensate the affected party for their injuries and property damage. You can also use your plan to cover both your own legal costs and the legal costs of the claimant, if necessary.
All in all, completed operations insurance is just another way that your liability insurance helps you keep your business secure. You can’t predict if a problem will happen, but you can ensure that you have the right financial protection from it. That way, your business won’t tank just because of a challenge that arises.