Premises and operations liability is the other coverage in part A of the CGL, not discussed in this article.
Products and Completed Operations coverage insures a policyholder specifically against BI and PD claims for damages resulting from negligence associated with businesses that manufacture something or sell a tangible product or good.
It is important to note that these coverage types are in effect when a product leaves your premises. Premises and operations liability covers your liability for damages that result on your property, before your goods are released.
Neither coverage type is 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 company that produces knives. A certain type of knife you make is prone to breaking at the handle, causing people to severely cut themselves while using it.
This means your design was negligent, making you liable for bodily injury caused to people who purchased and used it. Your products liability coverage would protect you against the ensuing lawsuits.
Imagine you own a company that builds homes. You built a two-story home with a staircase to the second floor. If someone were viewing the home for a potential purchase, and while walking up the stairs, grabbed the railing and it gave way, causing them to fall and break their hip, you would be responsible for the faulty construction.
You would be entirely liable for the resulting bodily injury. Since the house was fully built, this would be considered a completed operation, and you would have coverage for the damages resulting from this claim.