Completed operations coverage for Contractors

10 July 2014

This bulletin examines some of the confusion surrounding completed operations coverage for Contractors under their Third Party/Products Liability policies. We also suggest three considerations for review to ensure cover is in line with market expectations.

The term ‘completed operations’ is more formally associated with policy forms in North America but for this analysis we are restricting our assessment to the London Market and in particular what is provided to UK insureds. 

Understanding what protection a contractor’s Third Party/Products Liability (TPL) insurance policy may provide in respect of defective or damaged works for events occurring after work has been completed and handed over has always been a topic for lengthy debate within the insurance industry. Therefore, it is perhaps not surprising that there is considerable misunderstanding between contractors and insurers on what they can expect from their policy. This is an important issue, especially as there can be significant differences between the manuscript broker wordings and those issued on insurers’ standard forms. 

With no indication that these types of losses are likely to abate it is worth highlighting some of the difficulties with completed operations coverage. Perhaps as a starting point we could pose some initial questions that should be considered in conjunction with reading this paper. 

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For further information, please contact Patrick Harrington, Head of Construction claims on +44 (0)207 528 4120