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Insurance & Bondingaka: products and completed operations

Completed Operations Coverage

In Plain English

Insurance that covers a contractor for problems that show up after a project is finished.

Definition

Completed operations coverage is a component of commercial general liability insurance that protects a contractor against claims arising from bodily injury or property damage that occurs after a project is finished and the work has been turned over to the owner. Construction defects discovered months or years after project completion commonly trigger completed operations claims. Policies typically provide this coverage for a set period after project completion.

Why It Matters in Bidding

Completed operations coverage is what answers latent defect claims after turnover, so contracts often require it to stay in force for years past substantial completion, and that extended term carries premium cost the estimator should reflect in overhead. On bid day, owners and GCs frequently demand proof of completed operations coverage as a condition of award, and a gap in this coverage can leave the contractor self-funding warranty-period defect claims.

Example

An estimator notes the spec requires completed operations coverage maintained for several years after closeout and confirms with the broker the policy term, then factors the carrying cost into the firm's overhead rate.

Related Terms

Commercial General Liability (CGL)Professional LiabilityGeneral Aggregate

Frequently Asked Questions

Contracts commonly require it for a set number of years after substantial completion, aligned with statutes of repose for construction defects. Because claims can surface long after turnover, lapsing the coverage leaves the contractor exposed. Estimators should confirm the required term with the broker and carry the ongoing premium in overhead.
Ongoing operations coverage responds to claims during active construction, while completed operations responds to claims arising after the work is finished and turned over. Both are parts of the CGL framework. Owners frequently require completed operations to extend years past closeout, which is when many latent defects become visible.
Generally no. Like the rest of CGL, it covers resulting bodily injury or property damage caused by the completed work, not the cost to repair the faulty work itself. Estimators should not treat it as a substitute for warranty reserves or quality control during the build.

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