California Property & Casualty Broker-AgentCasualty InsuranceHard
A California business client operates a small, specialized construction company. They are purchasing a Commercial General Liability (CGL) policy. The owner is particularly concerned about lawsuits arising from bodily injury or property damage that occurs after a construction project has been completed and accepted by the client. Which part of the CGL policy specifically addresses this concern?
- APersonal and Advertising Injury
- BContractual Liability
- CProducts-Completed Operations Hazard
- DPremises and Operations Liability
Show answer & explanationAnswer & explanation
Correct answer: C. Products-Completed Operations Hazard
The Products-Completed Operations Hazard is an important component of Coverage A (Bodily Injury and Property Damage) in a CGL policy. It specifically covers claims for bodily injury or property damage that arise out of the insured's products or work after the products have been delivered or the work has been completed and put to its intended use.
Why the other options are wrong
- A. Personal and Advertising Injury covers non-physical injuries like libel or slander.
- B. Contractual Liability covers liability assumed under a contract, not general liability from completed work.
- D. Premises and Operations Liability covers incidents occurring *during* ongoing operations or on the business premises, not after completion.
Products-Completed Operations Hazard (CGL)
The Products-Completed Operations Hazard in a CGL policy covers bodily injury and property damage that occurs away from the insured's premises and arises out of the insured's product or work after the product has been delivered or the work completed.
- Crucial for manufacturers, contractors, and businesses that deliver products or complete projects.
- Coverage applies *after* the work is finished or product is sold.
- Subject to its own aggregate limit, separate from the General Aggregate Limit.
Memory trick: CGL Triggers: ON-SITE, AFTER-WORK, or WORDS!