Products and Completed Operations
Products and Completed Operations is part of the Commercial General Liability (CGL) policy related to commercial insurance. Some policies may exclude this coverage so it is important to ensure this coverage is applicable or it may be added on for an additional premium.
Specifically, this is a bodily injury (BI) and property damage (PD) coverage in part A of the CGL.
Products and Completed Operations coverage insures a policyholder specifically against BI and PD claims for damages resulting from negligence associated with businesses that manufacture something or sell a tangible product or good. Products and completed operations insurance coverage means that you will be protected for a product that you sell, in the event the item causes damage or injury. Suppose you manufactured and distributed a toy, and a child choked on it, that would be a product liability.
It is important to note that these coverage types are in effect when a product leaves your premises. Premises and operations liability covers your liability for damages that result on your property, before your goods are released.
Neither coverage type is extended to you or your employees. Employees are covered by workers compensation insurance.
Imagine you own a company that produces knives. A certain type of knife you make is prone to breaking at the handle, causing people to severely cut themselves while using it.
This means your design was negligent, making you liable for bodily injury caused to people who purchased and used it. Your products liability coverage would protect you against the ensuing lawsuits.
Imagine you own a company that builds homes. You built a two-story home with a staircase to the second floor. If someone were viewing the home for a potential purchase, and while walking up the stairs, grabbed the railing and it gave way, causing them to fall and break their hip, you would be responsible for the faulty construction.
You would be entirely liable for the resulting bodily injury. Since the house was fully built, this would be considered a completed operation, and you would have coverage for the damages resulting from this claim.