Los Angeles Claims Adjuster Property and Causality Practice Exam

What is "completed operations coverage" in CGL?

1. Coverage for ongoing business tasks

2. Coverage for liabilities associated with finished work

3. Coverage for raw materials used

4. Coverage for products manufactured on site

The correct answer is: Coverage for liabilities associated with finished work

Completed operations coverage in Commercial General Liability (CGL) insurance is specifically designed to provide protection against liabilities that arise after a contractor or business has finished a specific job or operation. This type of coverage kicks in after the work has been completed, and ensures that if any claims are made due to damages or injuries resulting from the completed work, the insurance policy will cover those claims. This coverage is critical for contractors and service providers because it addresses potential operational risks that may not become apparent until long after the work has concluded. For instance, if a construction project leads to an injury or property damage weeks or months after completion, completed operations coverage helps manage the associated liabilities, thus safeguarding the business from extensive financial losses caused by post-completion claims. The other options lack the nuances of completed operations coverage. Ongoing business tasks are better served by different types of coverage that focus on current operations, while coverage for raw materials and products manufactured pertains to other forms of liability that do not specifically address the aftermath of completed projects. Hence, the accurate choice highlights the importance of post-completion liabilities, which is central to the understanding of completed operations coverage.