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Do you know how "products completed operations" can affect your business?

Injury 3 Do you know how "products completed operations" can affect your business?

Not surprisingly, most business owners don’t.

Often times, when I review this coverage with a client, if their business is not manufacturing, they don’t think they need it. I have even been asked if it can be removed from the policy since they do not make any products within their business.

So what I would like to do is review some simple scenarios that can show how useful and important this coverage really is.

  • A self employed contractor builds a deck for a client – three months later the deck collapses and the client is injured. It is later determined that the contractor neglected to fasten the deck correctly and caused the deck to collapse.

  • A customer eats a hamburger at your restaurant and later makes a claim against the business claiming that they received food poisoning from eating at your establishment.

  • A heating and cooling business installs a new water heater in a client’s home. Three months later, the water heater leaks and causes property damage to the client’s home.

While some of these situations seem simple - they are common, everyday business operations that can affect many different industries.

It is important to note that to be covered, the injury or damage must occur away from your own premises, unless your business includes selling, handling or distributing your product for consumption on your premises.

Just as important to know is that this coverage only provides protection while the policy is in force.  So, if a business owner cancels the policy, closes their business or retires - and a claim arises three months later for work they performed during their policy period - they’re probably not covered.

So the next time you are reviewing your policy, make sure that your Products Completed Operations coverage is adequate for the risk you bear.

As always, I welcome any feedback that you may have and click on the above links for more information on this coverage.

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