Products & completed operations

When the coverage takes over

The general liability form defines a "products-completed operations hazard", and the definition is the useful part. It picks up bodily injury and property damage arising out of the subcontractor's work once that work is finished and once the loss happens away from premises the sub owns or rents. It expressly does not include work that is still under way, or work at the site that has not yet been put to its intended use.

So the same crew, the same policy and the same mistake fall into two different places depending on when the damage shows up. A pipe joint that fails while the plumber is still on site is ongoing operations. The same joint failing eighteen months after the owner moved in is completed operations — and that is the claim that arrives long after everyone has left, addressed to the general contractor.

Its own aggregate, and what that means for you

Look at the limits column on the ACORD 25. Under the general aggregate there is a separate line — products-completed operations aggregate. It is not a subdivision of the general aggregate; it is a parallel one. A sub whose general aggregate is untouched can still have this bucket half-consumed by a defect claim from a job three years ago, and the certificate shows you the limit, never the remaining balance.

That is the same blind spot the per-project aggregate exists to close, and here is the wrinkle worth knowing: it does not close it. The designated-construction-project endorsement gives a project its own general aggregate, and it states that damages inside the products-completed operations hazard are not covered by that project limit — they remain subject to the policy-wide products-completed operations aggregate, shared with every other job the sub has ever finished. A GC who bought a per-project aggregate and assumed the whole exposure was ring-fenced has ring-fenced the half that surfaces during the job, not the half that surfaces afterwards.

The tail is the whole reason it is in your subcontract

Subcontracts usually require this coverage to be maintained for some number of years after final completion. That clause exists because construction-defect claims are slow: water intrusion, settlement, a roof detail that fails in the fourth winter. The statute of repose in your state sets the outside edge, and the number in your contract is somebody's attempt to sit inside it.

Whether the requirement is meaningful depends on how the sub's policy is written. On an occurrence policy the policy in force when the damage happened responds, even if the sub has since changed carriers — so the tail requirement is really about the sub not going bare in the meantime. On a claims-made policy it is a different problem entirely: coverage attaches when the claim is reported, so a sub who lets the policy lapse has no coverage for their own past work unless they bought an extended reporting period. That distinction decides whether your tail clause is enforceable in practice or decorative.

Requiring the coverage, the endorsement and the years

• Require the coverage and the endorsement separately. "Products and completed operations coverage" and "additional insured for completed operations per CG 20 37" are two different asks, and a sub can honestly satisfy the first while giving you nothing on the second.
• Name the tail in years, tied to final completion, and pick a number you can defend against your state's statute of repose rather than a round one copied from another contract.
• Ask what happens if they change carriers, particularly on claims-made policies. The answer you want is an occurrence policy; the answer you can live with is a documented extended reporting period.
• Keep the certificate after the job closes. The exposure outlives the project by years, and a certificate you cannot produce is the same as coverage you never required — which is the whole argument in the records that survive an audit.

Hi [Agent name],

We're the general contractor on [Project]. Two questions on [Sub name]'s general liability that the certificate doesn't answer:

1) Is the products-completed operations aggregate shown on the certificate the full limit, or has any of it been eroded this policy period?
2) Our subcontract requires additional-insured status including completed operations. Could you confirm which form is on the policy and send a copy — CG 20 37, or the blanket form your carrier uses if it reaches completed operations?

If there's a per-project aggregate endorsement in place, I'd also like to confirm it doesn't change the products-completed operations limit.

Thanks,
[Your name], [Your company]