In the instance of the redwood deck, the completed operations coverage is designed to help pay for the bodily injuries sustained by the client when the deck collapsed. The products-operations completed aggregate limit — the most an insurer will pay for this specific bodily injury or property damage claim — is separate from the general aggregate limit.
Completed operations claims do not typically go against the general aggregate limit, which is the most an insurer will pay for all bodily injury, property damage, personal, and advertising injury claims. Why does this matter? One of these is the general aggregate limit for all general liability claims.
The second pitcher is the completed operations aggregate limit. To fill this empty glass, you can first pour water from the completed operations aggregate limit pitcher. Once this pitcher is empty, you can pick up the general aggregate limit pitcher to continue to fill the glass. For example, a third-party bodily injury at your place of business may be a premises liability claim rather than a completed operations claim.
But the incident must meet the completed operations criteria if it will be paid from the completed operations aggregate limit and not the general aggregate policy limit. The better you understand your general liability coverage, the better equipped you are to make decisions about your liability protection. Contractor Directory. Contractor Insurance November 15, Contractor Hub. What is Products and Completed Operations Liability? But product and completed operations liability coverage does have some limitations.
Completed vs Uncompleted Work Products and completed operations coverage only applies to work that has been finished. In this case, the company could be subjected to completed operations claim. In such a situation, someone could claim that the completed work is faulty, and it injured them or damaged their property. Hence businesses these days have their commercial general liability in place to take care of such claims.
A commercial general liability insurance involves a product completed operations aggregate that covers the liability incurred by insured for property damage or injuries that happens to some third-party once contracted operations are completed. Thus, a product completed operations aggregate in a commercial general liability includes all bodily injury and property damage occurring away from premises that the insured person owns or rents and arising out of his work, except:.
As personal and advertising injury claims do not fall within the products completed operations hazard, this aggregate limit applies only to bodily injury and property damage.
So any damage to the structure resulting from alleged construction defects would not be covered. This exclusion typically contains an exception for work performed by subcontractors to protect contractors from claims stemming from defective work performed by subcontractors.
Damage To Impaired" Property - This exclusion is confusing. In simple language - impaired property is someone else's property that cannot be used because your work or your product, which has been incorporated into that property, is inadequate or defective. The aggregate limit is the most your insurer will pay under your policy, in one policy term usually a year , for damages or settlements arising from your products and or completed operations.
The declarations page of a general liability policy will list how much the policy will pay for claims on behalf of its insured, for each specific limit. Below is in example of commercial general liability policy's limits of insurance as listed on the declarations page:.
We hope this article on what is products and completed operations coverage? When a person is injured because of your products or services, you don't have any control over the ultimate cost of that injury. The person injured may be a young child, a blue-collar worker, a surgeon or a homeless person. The cost of the injury may be comparatively minor or run into the millions of dollars, depending on the person and the extent of his or her injuries. Do you have sufficient assets to pay such a loss?
And if you do, should they be used to do so? Consult the policy for definitions and limitations. The information below does not represent contract terms. The policy is subject to company underwriting practices. This coverage includes the costs related to lawsuits and other legal proceedings. The limits of insurance selected should be sufficient to handle serious injuries and the loss of earnings of the injured party.
However, the coverage provided is subject to certain exclusions, conditions and definitions. Every insurance coverage form or policy has certain exclusions and limitations. This is because the coverages are either needed by only specific types of businesses or the risk or exposure to loss is not considered insurable. Conditions are obligations you owe the insurance company as well as obligations the insurance company owes you when a loss occurs.
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