Commercial General Liability Coverage: Product & Completed Operations Hazard

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This Months Topic: Commercial General Liability Coverage

 Product & Completed Operations Hazard

If you manufacture, sell or distribute a product of any kind, there is a possibility that the use of this product by one of your customers could potentially cause bodily injury. The most common and apparent example of a Products Liability exposure is all the warning labels manufacturers attach to a stepladder. Next time you are at a home improvement store take a look at all the warning labels the ladder manufacturer places on their product. Who really needs to be told not to stand on the top rung of a ladder? Or Watch Your Step!

The reason why the ladder manufactures places obvious warning labels on their products is because of the potential risk of someone injuring themselves from an undisclosed exposure that results in a hazardous fall. A product liability hazard exists when someone injures themselves as a direct result of the manufactures not disclosing the potential dangers or risks associated with owning their product. So that’s why it is wise for all manufacturers to properly inform their consumers of the potential dangers and risks associated with owning a particular product. Even if you are not the manufacturer, and simple sell someone else’s product, you could still be liable for bodily injury damages.  

The second part of this important coverage is called Completed Operations Coverage. If you install or repair products such as a heating system, you could be negligent should damage be caused by your work after your work is completed. Let’s say that you installed a new furnace in a restaurant, and later that day fire ensues. The fire marshal determines the cause of the fire to be from the product literature that was left inside the furnace that just happened to catch on fire, further melting a plastic cover causing black smoke to spread throughout the premises. The business had to close until repairs and cleanup could be completed. A substantial amount of money was lost due to the business being closed and the cleanup was in the thousands of dollars.

Both of the situations cited above would be covered under a Commercial General Liability Policy if your policy includes Products and Completed Operations Coverage.  Not sure if you’re commercial package includes this very important coverage? Then Give us a call at 740-286-5031 and we will be glad to help you better understand this important coverage and many more.

Michael Carlisle, Agent

Carlisle Insurance Agency