What Happens if a Claim Starts After the Contractor Finishes the Job?
The Risk Can Continue After the Job Is Finished
While a contractor is actively performing work, a claim may involve ongoing operations. After the work has been completed or put to its intended use, a later claim may fall into the completed operations portion of the liability exposure.
Ongoing Operations
A claim happens while the contractor is still performing work at the project.
Completed Operations
The work has been completed, but an alleged defect or problem later results in bodily injury or property damage.
The Problem May Not Be Immediate
Some allegations develop only after the completed work has been used, exposed to weather, or incorporated into a larger project.
Policy Terms Still Control
The insurance company will evaluate when the damage occurred, what caused it, and whether the claim meets the policy requirements.
What Could a Completed Operations Claim Look Like?
Completed operations claims can arise in many trades. The key issue is generally that the contractor’s work has already been completed when the alleged bodily injury or property damage occurs.
Plumbing Work
A completed plumbing connection later fails and water damages other portions of the property.
Electrical Work
Completed electrical work is later alleged to have caused a fire or damage to other property.
Roofing Work
After a roofing project is finished, an alleged installation problem later allows water to damage the building.
Construction Work
A completed component is later alleged to fail and cause injury or damage beyond the contractor’s own work.
What Should Contractors Review Before and After a Project?
Because claims may arise after a project is finished, contractors should pay attention to completed operations limits, policy continuity, contract requirements, and project documentation.
Completed Operations Limit
Review the applicable aggregate limit and understand how it relates to claims arising from completed work.
Policy Continuity
Avoid assuming that finishing a project means insurance is no longer important. Later claims may still create liability exposure.
Contract Requirements
Some contracts require completed operations protection or additional insured status for a specified period after work is finished.
Project Documentation
Keep contracts, change orders, permits, inspection records, photographs, invoices, and subcontractor information after the project is completed.
Review Your Contractor General Liability Coverage
Best Formula Insurance can help contractors review general liability coverage, completed operations limits, additional insured requirements, deductibles, endorsements, and other insurance considerations for current and completed projects.