Guides
Products and completed operations coverage
What the products-completed operations hazard covers in a CGL policy, when work counts as completed, why it has its own aggregate, and how to keep it in force.
Products-completed operations coverage is the part of a commercial general liability policy that pays for injury or damage that happens after you have sold a product or finished a job and it is out of your hands. In the ISO form it is not a separate policy but a defined "hazard" inside Coverage A, with its own aggregate limit. For a contractor it is often the larger exposure: the work can fail years after the invoice is paid, and the policy that answers is the one in force on the day of the injury, not the day you finished.
How the form defines the hazard
CG 00 01 defines the "products-completed operations hazard" in Section V. It includes all bodily injury and property damage occurring away from premises you own or rent and arising out of "your product" or "your work," with exceptions. Three pieces of vocabulary carry the definition (form text, 04 13 edition).
- Your product is goods, other than real property, that you manufactured, sold, handled, distributed or disposed of, including under your name or by a business you acquired. It includes containers, parts and equipment furnished with the goods, and warranties, representations, warnings and instructions. That last item matters: a failure to warn is a product claim.
- Your work is work or operations performed by you or on your behalf, plus materials, parts or equipment furnished with it, including warranties and the giving or withholding of warnings or instructions.
- Away from premises you own or rent. Injury on your own premises is a premises claim under the general aggregate. A diner sickened by a meal at your table is a premises claim under the standard definition; the same dish taken home is a product claim. Carrier forms and class rules sometimes treat restaurants differently, so check the declarations.
What the hazard leaves out:
| Excluded from the hazard | Why it matters |
|---|---|
| Products still in your physical possession | Inventory in your shop or truck is a premises or operations exposure |
| Work not yet completed or abandoned | Injury during the job falls under ongoing operations |
| Transportation of property (unless the condition arose from loading or unloading a vehicle you do not own or operate) | Delivery is an auto exposure |
| Tools, uninstalled equipment, abandoned or unused materials | Leftovers on a site stay in the ongoing-operations bucket |
| Classes the declarations mark "products-completed operations are subject to the general aggregate limit" | No separate products aggregate for those classes |
When is work "completed"?
The form deems work completed at the earliest of three moments:
- All the work called for in your contract is finished.
- All the work to be done at the job site is finished, if the contract calls for work at several sites.
- The part of the work done at a site has been put to its intended use by anyone other than another contractor or subcontractor on the same project.
Work that may still need "service, maintenance, correction, repair or replacement" but is otherwise complete is treated as completed. A warranty call to tighten a fitting does not reopen the job. The third test catches contractors who think they are still working: if the owner moves into the finished floor while the punch list drags on, that floor's work may already be completed operations.
Why it has its own aggregate
Section III gives the products-completed operations aggregate limit as the most the insurer pays under Coverage A for injury and damage inside the hazard. Everything else under Coverages A, B and C draws on the general aggregate. The split means a bad year of slip-and-falls does not use up the product limit, and vice versa. Each occurrence still caps any single event, whichever aggregate it erodes. The mechanics are in Inside the CGL policy: Coverages A, B and C.
Most underwriters price the hazard separately. For manufacturers and distributors the rating base is usually gross sales; for contractors it is payroll or receipts, tied to the class. A contractor who understates receipts pays for it at audit, and an underwriter who sees an unfamiliar product line will ask for a product list, recall history and contracts with suppliers. See premium audits: how they work and how to prepare.
Hypothetical timeline: a deck builder
Say a deck builder completes a rear deck in June 2025 and is paid in July. The policy runs July to July each year.
- June 2025. Work is complete. From now on, injury or damage from the deck falls inside the hazard.
- August 2026. A railing fails at a family party. A guest is hurt. The policy in force in August 2026 responds because the injury occurred then. The injury is charged to that year's products-completed operations aggregate and to the each occurrence limit.
- 2027. The builder retires and cancels the policy. A deck collapses in 2028. No policy was in force, so the builder pays the defense and the damages personally, and stays exposed for as long as the statute of repose allows claims.
A builder who winds down should ask the broker about keeping completed operations cover or buying a completed-operations-only policy for the tail. Not every market offers one.
Contractors: what the contract and the endorsements do
Completed operations is where contracts and endorsements collide.
- Additional insured status. A standard ongoing-operations additional insured endorsement such as CG 20 10 stops covering the owner or general contractor when your work is done. CG 20 37 extends additional insured status to completed operations. Contracts that require completed operations cover for a number of years after final completion are common. See additional insured endorsements explained.
- The subcontractor exception. Under exclusion l of CG 00 01, damage to your completed work is excluded unless the damaged work was performed by a subcontractor. General contractors lean on that exception. ISO's CG 22 94 removes it, which can eliminate the cover for damage to the project itself; CG 22 95 does the same for designated sites or operations only. If a contractor's policy carries either, the CGL no longer pays for subcontractors' defective work. This is the endorsement to look for first. See managing subcontractor insurance and certificates.
- Other exclusions. Designated work or designated products exclusions (CG 21 34 and CG 21 33), residential or condominium exclusions, and total exclusions of the hazard itself (CG 21 04) each remove what the grant would otherwise give.
- Wrap-ups. Owner- and contractor-controlled insurance programs usually carry completed operations cover for the project for a stated period after completion, which changes what individual contractors must buy. See Wrap-up programs: how OCIPs and CCIPs work.
- Court differences. Whether defective work is an "occurrence" depends on the state. The Texas Supreme Court held in 2007 that unintended construction defects can be an occurrence, as Insurance Journal reported; other states read the form differently, and so do courts on which policy year responds when damage develops slowly. Ask your broker how courts in your state treat it. See General contractor insurance, Texas and Florida.
The statute of repose sets the outer limit
A statute of limitations runs from when the injury is discovered. A statute of repose runs from a fixed event, usually substantial completion, and cuts off construction claims even if nothing has gone wrong yet. According to a 50-state law-firm survey current as of August 2024, 10 years is the most common repose period, Texas is 10 years for private parties, Florida 7 and Pennsylvania 12, and the shortest general periods are as low as 4 years. Periods change by statute, vary by claim type and are measured from different trigger dates, so confirm the current statute with a construction attorney. For a contractor, the repose period is roughly how long the completed operations tail lasts.
Makers, sellers and importers
The same hazard covers manufacturers, wholesalers and retailers for the products they put in other people's hands, with extras. A retailer or distributor is usually a "vendor" under a manufacturer's policy; a vendors additional insured endorsement (CG 20 15) is what a retailer asks its suppliers for. Recall costs are excluded (exclusion n), and a defect that damages only the product itself is excluded (exclusion k). The wider product exposure, including foreign suppliers, labeling and design claims, is covered in product liability insurance for makers, sellers and importers.
Renewal checklist
- Confirm the declarations show a products-completed operations aggregate, and that your classes do not say the hazard is subject to the general aggregate.
- Search the forms schedule for CG 22 94, CG 22 95, CG 21 04, CG 21 33 and CG 21 34.
- Compare your limits with the contracts you signed; see contract insurance requirements checker.
- Keep a log of project completion dates and product ship dates; your broker and any future insurer will ask.
- If you changed carriers, confirm the retro or prior-acts position on any claims-made policy (see occurrence vs claims-made policies).
- Do not let the CGL lapse while completed work is still in the field; the exposure continues after the last invoice.
Key takeaways
- The products-completed operations hazard covers injury and damage away from your premises that arises from your product or from work you have completed or abandoned.
- Work is "completed" at the earliest of finishing the contract, finishing the site, or the owner putting your part to its intended use.
- The hazard has its own aggregate in the standard form, unless the declarations class says otherwise.
- CG 20 37, CG 22 94 and the repose period in your state determine how the exposure plays out for contractors.
- The policy in force when the injury happens responds, so maintain cover long after the last invoice.