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Products-Completed Operations

What Is Products-Completed Operations Coverage?

Products-completed operations insurance is two types of coverage in one, covering both the products you sell and the services you provide. These are bundled together under the same aggregate limit on your general liability policy.

Products completed operations definition.

What Does Products-Completed Operations Cover?

Product coverage protects you against claims involving the products you import, manufacture, distribute, or sell.

For example, if a customer gets food poisoning from the chicken wings you sold them, your insurance could cover their medical bills and other related losses.

On the other hand, completed operations coverage addresses claims related to work that you finished. Let’s say you made a tiered cake for a wedding. After you set it up and left the event hall, one of the supports broke and the cake fell over. The family sues you for damages.

Completed operations can pay for your legal fees and judgments.

Who Needs Products-Completed Operations Coverage?

You need product-operations coverage If your business makes, sells, or distributes a product or provides work or services. A single claim can cost thousands of dollars, but this insurance can absorb some or all of your out-of-pocket responsibility.

Products-Completed Operations Aggregate Limit Claim Examples

Food Liability Insurance Program (FLIP) has a products-completed operations aggregate limit of $2,000,000. This is the maximum amount your insurance will pay for these claims within a policy period—typically 12 months.

Here are a few scenarios that could impact your aggregate limit:

  • A customer chips a tooth on a popcorn kernel from your kettle corn stand, resulting in a $5,000 dentist bill.
  • An employee accidentally cross-contaminates a prep container with peanut butter and a customer has a severe allergic reaction. The customer needs an ambulance ride and emergency care that costs $10,000 in total.
  • You accidentally serve fish that was stored in a broken refrigerator, resulting in a customer getting food poisoning. They sue you for $4,000.

 

In each of these cases, your products-completed operations insurance could cover the claim, reducing your aggregate limit by the amount of the payout.