As a general contractor, you likely boast of being licensed, bonded, and insured. But, do you have Completed Operations Insurance? At Pinnacle Peak Insurance Group, we are a family and locally owned insurance agency located in Scottsdale, but proudly serving the entire state of Arizona. We proudly offer commercial insurance for business owners, including Completed Operations insurance – a necessity for all general contractors!
What is Completed Operation Insurance Coverage?
First off, what is completed operation insurance coverage? It is insurance for contractors and manufacturers that transfers to a third party, the risk associated with an insured’s service and/or work that has caused bodily injury and/or property damage. Completed operations do not cover product recalls, which would fall under product liability.
A general liability policy can include completed operations insurance, but there can also be exclusions for completed operations. As a contractor, it is important that you know what your exclusions are, if any. Many contractors and manufacturers will purchase additional or separate completed operations coverage for more protection amounts then their General Liability policy will allow, which is a smart thing to do!
Know the Exclusions of Your General Liability Policy
When it comes to your general liability policy, one of the biggest exclusions could be “impaired” operations exclusion. An example of this would be if you are an excavator and you have constructed the house pad for a new build, and then once the house pad is completed, other contractors come in and complete the home. A few months go by, and the house pad begins to fail and the home becomes inhabitable. Your insurance carrier will not pay for the repairs because your work is part of a larger effort. The “impaired” exclusion means: if the property is defective or becomes unusable because it contains your defective work or product, there will be no coverage for such a claim.
Examples of Completed Operations Without Exclusions:
Example of Covered Claims:
- Finally, you are going to do that bathroom remodel. Not wanting to DIY the plumbing, you have hired Pete’s Plumbing to install your new toilet and shower. All the work is completed and it looks amazing. The next month, you go out town for the weekend, only to come home to water running out your front door. The newly installed toilet wasn’t sealed property and now your entire home is a disaster. This would be a Completed Operations claim for Pete’s Plumbing.
- Ralph’s Roofing has just installed the new roof on your office; it was the last piece of updating that needed to be completed. 6 months have passed and all is good, until the first heavy rain of summer comes and there are leaks everywhere. The roof has leaked so badly that it has damaged your server room, taking your web company offline, along with millions of customers. This would be a completed operations claim for Ralph’s Roofing.
There are many ins and outs to insurance coverage for your business and many options to bundle and/or exclude certain coverages. At the end of the day, it is your choice as a business owner as to what you want to be covered for. Having an experienced licensed Commercial Insurance Agent is extremely important to make sure that all moving parts of your business have been discussed and are protected the way they should be. Get in touch with Pinnacle Peak Insurance today to discuss your options!