A simple guide to understanding completed operations liability and how it protects contractors after a job is finished.
Understanding Completed Operations Liability
When a contractor finishes a job, most people assume the work is done and the risk is over. But in the insurance world, that’s not always true. Problems can show up weeks, months, or even years later. That’s where completed operations liability comes in. It protects contractors and similar businesses if someone is injured or experiences property damage because of their completed work.
Think of it as insurance that continues to protect you even after you pack up your tools and leave the job site.
Completed operations liability is commonly included in a general liability policy, especially for people who work with their hands—contractors, plumbers, electricians, carpenters, repair shops, and many other service-based companies.
Understanding Completed Operations Liability
Professionals who work on buildings, systems, or equipment face a unique kind of risk: their work might cause harm after they’ve already left. Even when a contractor does everything correctly, unexpected issues can still happen.
Protection When Problems Show Up Later
Imagine an electrician installs wiring in a new kitchen. Everything works perfectly—until a few months later when a wiring fault causes a fire. Even though the electrician isn’t on site anymore, they can still be held legally responsible for the damage. Completed operations liability helps cover this type of claim.
Covers Bodily Injury and Property Damage
This coverage steps in when someone gets hurt or when property is damaged because of faulty or defective work. For example:
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A contractor’s installed railing collapses weeks later and someone is injured.
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A plumber’s completed repair later leaks and damages a homeowner’s floors.
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A repair shop works on a vehicle, and the vehicle later malfunctions, causing an accident.
Without completed operations liability, the business could face expensive out-of-pocket bills, lawsuits, and repair costs.
Safeguards the Business’s Reputation
Accidents happen—even to skilled professionals. Having this coverage shows customers that the business takes responsibility seriously. It helps protect both the company’s finances and its long-term reputation.
What Does Completed Operations Liability Cover?
While coverage details vary by policy, completed operations liability typically includes:
1. Legal Defense Costs
If someone files a lawsuit, the insurance can help cover attorney fees, court costs, and settlement expenses.
2. Medical Expenses and Injury Claims
If a person is hurt because of faulty completed work, this coverage can help pay for medical bills and related damages.
3. Repair or Replacement Costs
If the work caused property damage—like a burst pipe or faulty roofing—the policy may help cover the cost of fixing the problem.
4. Coverage Away from the Contractor’s Premises
This is important: completed operations liability applies to work done away from the insured’s business location. It’s meant to protect work completed at a customer’s home, building, or property.
What Completed Operations Liability Does Not Cover
It’s also helpful to know what this coverage doesn’t typically include:
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The cost to redo faulty work itself
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Damage to the contractor’s own tools or equipment
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Issues caused by work that is still in progress
This coverage is specifically designed for problems that arise after the job is finished or abandoned.
Who Needs Completed Operations Liability?
Any business that performs physical work or repairs for others can benefit from this coverage. This includes:
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General contractors
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Plumbers
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Electricians
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HVAC technicians
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Mechanics and repair shops
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Carpenters and handymen
Even small jobs can lead to big claims, so this coverage is valuable for businesses of all sizes.
Final Thoughts
Completed operations liability may not be the first thing contractors think about, but it plays a crucial role in protecting their business long after the job is done. From unexpected injuries to property damage, this coverage helps professionals stay prepared for the risks that can appear long after they finish their work.
For anyone working in the trades or repair services, completed operations liability isn’t just optional—it’s a smart way to protect your financial future and your business’s reputation.
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