Overview
Construction and contracting projects generate two different kinds of liability: incidents that occur while work is still in progress, and harm that results after a completed project is put to use. This article explains the second type — where a finished piece of work causes injury or damage to someone or their property after the contractor has finished performing the work.
Key takeaways
- Completed-operations claims arise from finished work that later causes bodily injury or property damage.
- Coverage usually applies to damage caused by the work, not to repair or replace the defective work itself.
- There are timing and location tests that determine whether a claim qualifies as completed-operations exposure.
How it works
- The injury or property damage must arise from your completed work or the finished product you supplied.
- The claim generally must occur away from the premises you own or rent where the work was performed.
- The work must be complete or the contractor must have abandoned the project when the injury or damage occurs.
What it may cover (and what it may not)
Completed-operations coverage focuses on the consequences of faulty work. For example, if a misplaced steel element falls from a bridge and damages a vehicle, the resulting damage to the vehicle and any bodily injuries are typically what completed-operations insurance responds to, not the cost to replace the steel itself.
Specific industries and situations can have nuances. For additional detail on how completed-operations exposures work in specialized settings, see Completed Operations Liability for Moving and Storage.
Common mistakes to avoid
- Assuming the policy pays to repair or rebuild your defective work — most policies cover third-party loss, not the cost to correct the work itself.
- Failing to document which portions of the job were performed by subcontractors versus your direct crew, which complicates coverage and subrogation later.
- Releasing a project for final use before you verify that it meets safety and functional standards.
- Not performing routine quality-control checks and material testing during installation, increasing the chance of latent defects.
Questions to ask an agent
When reviewing your policy, ask whether completed-operations coverage applies to subcontractor work and how long after project completion the insurer considers a claim eligible for coverage.
Also discuss the relationship between your general liability limits and contractor-specific exposures; for a contractor-focused view of those issues see Contractor Operations General Liability.
If you want guidance on the policy language or need help obtaining a certificate for a client, consider using the option to talk to an agent who can review your contract requirements and insurance limits.
Next steps
Limit your firm's exposure by performing only the work you are competent to complete and subcontracting specialized scopes to qualified trades. Require certificates of insurance from subcontractors and retain documentation of their work scope.
Perform and record quality-control inspections and material tests during the project, and fix defects before you release the work for its intended use. If a loss occurs, notify your carrier promptly and preserve evidence to support subrogation if the subcontractor is responsible.
Frequently Asked Questions
When does completed-operations coverage apply?
It applies when bodily injury or property damage arises from work you completed and the claim occurs after the work is finished or abandoned and typically away from your insured premises.
Does this coverage pay to replace my defective work?
Generally no; coverage usually pays for third-party injury or property damage caused by the defective work, not to repair or replace the faulty work itself.
How does the subcontractor exception affect coverage?
Policies often exclude damage to work you performed, but they may still cover damage that arises from a subcontractor’s work; check policy language and document subcontractor responsibilities carefully.
What should I document to help a claim or subrogation?
Keep contracts, change orders, inspection reports, material test results, and proof of who performed each portion of the work to support coverage and any recovery against a responsible subcontractor.