Products and Completed Operations: Protects Your Business from Costly Claims After Your Work or Products Leave Your Hands
Even after a job is finished or a product is sold, your business can face costly lawsuits from injuries or property damage. This coverage ensures you’re protected when the unexpected happens long after the work is done—providing vital peace of mind for business owners.
When Products & Completed Operations Makes the Difference
Real scenarios that show exactly when and how products and completed operations liability coverage protects business owners.
Simple Installation, Surprising Claim
Maria's team at a local electrical company completed an office lighting upgrade for a client. Several months later, a circuit malfunction caused minor property damage in the office. Her products and completed operations coverage paid the $4,200 tab for repairs and associated losses. Instead of paying thousands out of pocket, Maria only paid her $500 deductible and kept her client relationship strong.
Product Issue Discovered After Sale
Carl's bakery sold a batch of specialty desserts to a corporate event. Two guests reported allergic reactions traced back to an undeclared ingredient after the event. Products and completed operations coverage stepped in to handle $10,000 in medical expenses and legal fees. Instead of damaging his reputation or finances, Carl paid only his $1,000 deductible and resumed business quickly.
Major Claim after Construction Project
A general contractor, Lucas, completed a large retail remodel. Months later, part of the installed shelving collapsed, causing injuries and significant property damage. The contractor’s products and completed operations coverage paid $130,000 in claims, covering medical bills, legal defense, and replacement costs. Without it, Lucas’s business could have faced bankruptcy—instead, he kept operations running and his reputation intact.
Products & Completed Operations Explained: The Details That Matter
The complete picture: what's covered, what's not, and how to decide if you need it.
Products & Completed Operations (Plain English)
Products and completed operations liability coverage protects your business if your work, service, or products cause injury or property damage after you’ve finished the job or sold the goods. When a client or third party is harmed due to something you built, installed, or sold long after delivery, this coverage pays for legal costs, settlements, and damages up to your policy’s limits. The key thing to understand is that it safeguards your business from future risks tied to your completed work.
Important Details and Fine Print
Every policy includes a deductible (what you pay out of pocket, like $500 or $1,000) before coverage kicks in. Policy limits typically start at $1 million per claim, with options for higher protection based on your business type. Claims are often paid based on actual incurred losses, including legal fees. You must demonstrate that the incident resulted directly from your product or completed work. Certain exclusions may apply—such as work in progress or products still under your care, which aren’t covered here.
Products & Completed Operations vs. Other Coverages
Products and completed operations is NOT the same as general premises liability. Products and completed operations protects you after you finish a job or sell a product, while premises liability covers accidents that happen on your property. You typically need both to be fully protected.
Who Needs Products & Completed Operations Coverage?
You typically need this coverage if:
- You are a contractor, manufacturer, installer, or seller of physical products
- You complete services or projects that could cause harm after delivery
You might skip this coverage if:
- Your business only provides advice or consulting, never physical work or products
Coverage Limits and Options
Your policy limits should reflect the size and risk profile of your business. Standard limits start at $1 million per claim/$2 million aggregate, but many Colorado and Utah businesses benefit from higher limits. Deductibles are typically $500 to $2,500. Add-ons like umbrella insurance or endorsements may extend protection for certain products, recall events, or high-risk projects.
What's NOT Covered by Products & Completed Operations
This coverage does NOT cover:
- Work still in progress: If damage happens before a job is signed off, this is not covered.
- Product recalls: Costs to recall, repair, or replace all products are not included.
- Intentional wrongdoing or faulty designs: Deliberate acts or unapproved modifications are excluded.
For these situations, you’d need other types of liability or specialty coverages.
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How Products & Completed Operations Actually Works
Understanding exactly what happens when you file a products and completed operations claim - from start to finish.
The Claims Process
- Report the Incident: Contact your insurance advisor as soon as you become aware of a possible claim, even if it’s months after project completion or product sale.
- Documentation & Investigation: Provide details like contracts, receipts, customer communication, and information about the alleged incident. An adjuster will verify if the claim is related to your completed work or product.
- Legal and Technical Review: Insurer works with legal experts and technical assessors to estimate damages, liability, and defense strategies. You’re kept updated throughout.
- Resolution & Payment: If the claim is approved, insurance pays for covered damages, settlements, and legal defense—minus your deductible. If not, your advisor will explain next steps and alternative solutions.
What You Pay
Your deductible—usually $500 to $2,500—is the amount you pay per claim before insurance coverage begins. Your premium covers legal fees, settlements, and damage after that. The deductible you select influences your premium: higher deductibles lower monthly costs, but be sure you can pay your chosen amount if an incident happens.
Timeline
Straightforward claims may resolve in a few weeks, while complex cases involving legal action or major injuries can take several months. Most clients find the process transparent and supportive. Prompt reporting is key—the sooner you notify your broker, the sooner your claim reaches resolution.
What Products & Completed Operations Actually Costs vs. What You Risk
Understanding the real financial impact: what you pay for coverage vs. what you risk without it.
Minor Incident After Work Completion
Annual Coverage Cost: $450
Scenario: Small water leak damages a client’s flooring three months after a plumbing installation is done.
Without Coverage: $3,800 out-of-pocket
With Coverage: $500 deductible (plus your annual premium)
Protection Value: $3,300 saved—plus client trust preserved
Moderate Product-Related Claim
Annual Coverage Cost: $650
Scenario: Product defect leads to customer injury at a retail location.
Without Coverage: $18,000 out-of-pocket
With Coverage: $1,000 deductible (plus your annual premium)
Protection Value: $17,000 saved and no legal headaches
Major Catastrophic Claim
Annual Coverage Cost: $1,100
Scenario: A construction defect causes collapse and injury months after project sign-off.
Without Coverage: $150,000+ out-of-pocket
With Coverage: $2,500 deductible (plus your annual premium)
Protection Value: Over $147,000 saved and business continuation
The Economic Reality
For most business owners, products & completed operations coverage costs $40–$120 a month—less than a few cups of coffee each week. A single incident could cost thousands to hundreds of thousands of dollars, threatening your finances and business future. The math is simple: This coverage pays for itself the first time you need it, giving you staying power and peace of mind.
4 Costly Products & Completed Operations Mistakes to Avoid
Learn from others' mistakes - avoid these common errors that can leave you unprotected when you need coverage most.
Assuming General Liability Covers Everything
Many business owners believe that general liability automatically protects them from claims due to their work or products after the job is done. This gap can result in significant uncovered claims. Instead, ensure your general liability policy specifically includes products and completed operations coverage. Review your exclusions with a broker.
Not Updating Coverage for New Products or Services
If your business adds new offerings but doesn’t revise its policy, you may leave major exposures unprotected. Unlisted work or products may not be covered. Instead, update your broker every time your business grows or changes so your coverage evolves with you.
Choosing the Lowest Possible Limit
Some owners try to save on rates by opting for minimum limits. Large claims can quickly exceed basic coverage, leaving you responsible for the difference. Instead, choose limits that reflect the potential size and risk of your projects or products.
Not Reporting a Potential Claim Promptly
Delaying notice to your insurer after a problem arises—especially when you think it's minor—can jeopardize your coverage. Late reporting may result in a denied claim. Instead, let your broker know immediately about any potential incident, no matter how small it seems.
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