Products and completed operations is the other coverage in part A of the CGL, not discussed in this article.
Premises and operations coverage insures a policyholder specifically against BI and PD claims for damages resulting from negligence associated with owning property and the day-to-day operations necessary to conduct business.
This coverage is not extended to you or your employees. Employees are covered by workers compensation insurance.
Let’s look at an example of each:
Imagine you own a clothing store at a fixed location. As the owner, you are liable for both injury and property damage suffered on your premises as a result of your negligence.
Perhaps the parking lot is icy and someone slips and falls as a result. It is your duty to maintain a safe shopping environment; therefore you would be responsible for the resulting injuries. Premises coverage, as part of your CGL, will cover these types of losses.
Imagine you own a window washing service. As a result, you would conduct business at multiple locations you don’t necessarily own. This is where Operations coverage is necessary.
Perhaps you are washing the 5th floor windows while strapped to the building. If you were to drop a bucket of water and hit someone on the head, you would be liable for the resulting injuries caused to the individual. Operations coverage would be triggered by the resulting claim for bodily injury.
Of course, there are multiple businesses in which both coverage types are necessary. An example of this may be the ownership of a landscaping company. You might have a fixed location where you sell lawn maintenance equipment, while also performing actual landscaping at multiple locations.