Products/Completed Operations

Overview

Products/Completed Operations coverage is a critical component of a Commercial General Liability (CGL) policy that responds to claims arising after the insured's work is finished or after a product has been delivered. This coverage is essential in construction and real estate because liability exposure does not end when a contractor leaves the job site — it extends for years after project completion.

How It Works

The CGL policy divides coverage into two main categories: premises/operations (covering claims during active work) and products/completed operations (covering claims after work is done). The products/completed operations hazard applies to:

• Completed operations: Bodily injury or property damage arising from the insured's work after it has been completed or abandoned. For example, if a roof installed by a contractor leaks six months later and damages the building interior, the completed operations coverage responds.
• Products: Bodily injury or property damage arising from a product manufactured, sold, or distributed by the insured after it leaves their possession. For example, if a fabricated steel component fails and causes a structural collapse.

Products/completed operations claims are subject to a separate aggregate limit — the Products/Completed Operations Aggregate — shown on the ACORD 25 certificate. This aggregate is independent of the General Aggregate, meaning claims in this category do not erode the general aggregate and vice versa.

Work is considered "completed" when:

• All work under the contract has been finished
• All work at one job site has been finished
• The work has been put to its intended use (for work that has not been completed)

Compliance Relevance

Products/completed operations coverage is among the most scrutinized requirements in construction and commercial real estate compliance:

• Contractual duration: Many contracts require vendors to maintain products/completed operations coverage for a specified period after project completion — commonly 2 to 5 years. This protects against latent defects.
• Separate aggregate: The products/completed operations aggregate limit must be verified independently. A policy with a $2,000,000 general aggregate and a $2,000,000 products/completed operations aggregate provides $4,000,000 in total potential coverage.
• "Your work" exclusion: Standard CGL policies exclude property damage to the insured's own completed work. The Subcontractor Exception (CG 22 94 or CG 22 95) can remove this exclusion for work performed by subcontractors, and is frequently required by contract.
• Additional Insured for completed operations: The standard CG 20 10 endorsement only covers ongoing operations. A separate CG 20 37 endorsement is needed to extend Additional Insured status to the completed operations period.

Example

A concrete contractor finishes a parking garage for a commercial building. Two years later, a structural defect in the concrete causes a section of the garage to crack and collapse, damaging vehicles. The property owner files a completed operations claim against the contractor. Because the contractor maintained their CGL policy with products/completed operations coverage (and the required CG 20 37 endorsement), the property owner is covered as an Additional Insured for the completed operations claim.