Here's something most contractors don't think about until it's too late: your work doesn't stop being your responsibility the moment you pack up your tools and leave the job site. A pipe you installed could burst six months later. A deck you built could collapse a year down the road. An electrical system you wired could cause a fire two years after you cashed the final check. When these things happen—and statistically, they do—you need protection. That's where completed operations coverage comes in.
If you're a contractor, installer, or anyone who completes work for clients and then walks away, this coverage isn't optional—it's essential. Let's break down what it is, why you need it, and how it works in the real world.
What Is Completed Operations Coverage?
Completed operations coverage is insurance that protects you from liability claims related to work you've already finished. It covers bodily injury and property damage caused by your completed work after you've turned the project over to your client. Think of it as the safety net for everything that happens after you say "all done."
The good news? You probably already have this coverage. It's typically bundled into your commercial general liability policy as part of Coverage A. But just because it's there doesn't mean you understand how it works or whether you have enough of it.
Here's the critical distinction: your general liability insurance covers you while you're on the job site—if someone trips over your equipment or you accidentally damage a client's property during the work. Completed operations coverage kicks in after you've left and the work is considered "complete." Once you finish, premises operations coverage leaves off and completed operations coverage takes over.
When Is Work Actually "Complete"?
This isn't as straightforward as you might think. Your work is considered complete at the earliest of three possible moments: when all work called for in your contract has been finished, when all work at the specific job site is done if your contract covers multiple locations, or when that portion of the work has been put to its intended use by anyone other than another contractor working on the same project.
That last one catches people off guard. If you're an electrician who finishes wiring a room and the homeowner starts using it while other trades are still working on different parts of the house, your work is considered complete. The clock has started.
Real-World Examples of Completed Operations Claims
Let's make this concrete with scenarios that happen every day:
A plumbing contractor finishes a bathroom renovation. One month later, a pipe bursts and causes extensive water damage to the floor below. The homeowner files a claim for the water damage—that's completed operations territory. Your policy would cover the cost of repairing the damaged flooring, ceiling, and personal property, plus your legal defense if the homeowner sues. But here's the catch: it won't pay to replace the faulty pipe you installed.
Or consider this: an electrical contractor finishes wiring an industrial manufacturing plant. Two years later, an electrical fire destroys the facility and equipment inside. The owner sues the contractor, even though an investigation shows the contractor's work wasn't actually at fault. Completed operations coverage provides legal defense, and in this case, it's found the claim has no merit. Without this coverage, the contractor would have paid tens of thousands in legal fees out of pocket.
Here's another common one: a general contractor builds a deck that looks perfect at completion. Six months later, it collapses during a family barbecue, injuring a homeowner. That injury claim, along with medical bills and potential lost wages, falls under completed operations coverage.
Understanding Your Coverage Limits
Most completed operations policies have two key numbers you need to know: the per-occurrence limit and the aggregate limit. A typical policy might offer $1 million per occurrence and $2 million aggregate. The per-occurrence limit is the maximum your insurer will pay for any single incident—so if that deck collapse results in $800,000 in medical bills and legal costs, you're covered. The aggregate limit caps the total amount your insurer will pay for all completed operations claims during your policy period.
Here's what makes completed operations different from your ongoing operations coverage: it has that separate aggregate limit. Once you hit that $2 million cap across multiple claims, you're on your own for the rest of the policy period. This is why contractors working on high-risk projects or using materials prone to failure often need higher limits.
What Affects Your Coverage Cost?
Several factors determine what you'll pay for completed operations coverage. First, your coverage limits matter significantly—a policy with a $10 million limit will cost considerably more than one with a $1 million limit because your insurer carries risk for an extended period, typically 10 years after project completion.
The type of work you do plays a huge role too. Commercial contractors generally pay less than residential contractors because the likelihood of future claims is statistically lower. The materials you use matter as well—contractors who build primarily with wood instead of steel typically see higher premiums due to the increased risk of structural failure over time.
Your trade also influences pricing. An HVAC technician installing systems that could leak and cause water damage might pay different rates than a painter whose completed work poses less ongoing risk.
Why This Coverage Isn't Optional
Beyond the obvious protection from potentially devastating lawsuits, completed operations coverage is often legally or contractually required. Many states mandate this coverage as a condition of maintaining your contractor's license. If you want to work legally, you need it.
More immediately, clients require proof of this coverage before awarding contracts. That commercial property owner isn't going to let you install their HVAC system without seeing a certificate of insurance that includes completed operations coverage. General contractors demand it from their subcontractors. It's not just about protection—it's about being able to work at all.
Consider the timeline too. Most states have a statute of repose for construction defects—typically around 10 years. That means someone can file a claim against you for work you did nearly a decade ago. Without completed operations coverage running for that entire period, you're personally liable for any claims that arise. A single significant claim could bankrupt your business or drain your personal assets.
How to Get the Right Coverage
Start by reviewing your current commercial general liability policy. Look for the products-completed operations aggregate limit—it should be listed clearly in your declarations page. If you don't see it, call your agent immediately. If you have it, consider whether the limits match your risk exposure. Think about the size of projects you work on, the types of materials you use, and what a worst-case scenario claim might look like.
When shopping for coverage or reviewing your current policy, ask specific questions: How long does the coverage extend after project completion? What specific exclusions apply to your type of work? Are there any requirements for how you document project completion? Understanding these details now prevents ugly surprises when you need to file a claim.
Finally, don't make coverage decisions based solely on price. The cheapest policy might have lower limits, more exclusions, or an insurer with a reputation for fighting claims. You want an insurance partner who will actually be there when a client's attorney comes knocking three years after you finished a job. Get quotes from multiple insurers, compare not just price but coverage breadth and limits, and choose based on the best overall value for your specific business needs.
