Insurance · Commercial General Liability

What is 'completed operations' coverage in CGL?

Correct answer

Coverage for liability arising from the insured's work after the work is completed and the insured has left the work site — for example, a contractor's faulty wiring that causes a fire months later

  1. A Coverage for closing a business
  2. B Coverage for liability arising from the insured's work after the work is completed and the insured has left the work site — for example, a contractor's faulty wiring that causes a fire months later
  3. C Coverage for completed payments
  4. D Coverage for office tasks

Why this is the answer

Completed Operations coverage protects against liability claims arising from the insured's work after the work is completed and the insured has left the work site. Critical for contractors, repair services, installers, and similar businesses. The 'completed operations hazard' is defined to include work that has been substantially completed at the work site, or work that has been put to its intended use, after the contractor leaves. Example: an electrician completes a wiring job; a year later, faulty wiring causes a fire — that is a completed operations claim. Without completed operations coverage, the electrician's CGL would not respond. Most CGL policies include completed operations automatically (subject to a separate aggregate limit), but some policies and endorsements exclude or limit it — particularly for construction defects. Completed operations coverage often must be maintained for years after the work is done to cover delayed manifestations of problems.
Source: NAIC Model Outline, Completed Operations

Practice more questions

This question is from our Insurance License Practice Tests practice test. Take the full practice test to test your knowledge across all Commercial General Liability and other topics.

Take the Casualty Insurance practice test →

New to this exam? Our Insurance exam guide explains the format, scoring, and how to prepare.

Related questions

State-specific guides

Need information for your state? Our state guides cover local requirements, fees, and what to expect on exam day.