It happens more often than you’d think. You’ve finished a job, packed up your equipment, and you’ve even been paid. However, two months down the road you find out that the house you re-wired just suffered a major electrical fire due to your negligence. Did you know that you’re actually still liable even though you completed the job months ago?. Completed operation liability is something every electrical contractor should know about and how it must be included in their insurance policy.
What Is It?
Completed Operations Liability simply refers to the liability you can incur as a contractor for property damage or bodily injury that can happen to a third party, once the job has been completed. Even though the job may be seen as completed by you, the contractor, the loss or injury that is directly linked to the work that was completed.
What Are The Hazards?
The hazards can be severe due to many factors. Improper wiring or grounding is a major cause of completed operations accidents. Both power failures and power surges resulting from negligence can result in serious property and bodily damage. There are three areas of work in where there is potential for catastrophic loss:
- Medical Facilities– full of vital equipment used to keep patients alive and healthy. Loss of power could mean loss of lives.
- Large Manufacturers– where assembly lines and large machinery keep businesses in operation. Loss of power means loss of time and money.
- Alarm System Installation– alarms protect anything from priceless art collections to your local bank. They keep valuables safe, and without power to these alarms, large sums of money are at stake.
What Kind Of Coverage Do I Need?
Typically, completed operations liability will always be covered in your General Liability Insurance policy. For these specific types of exposures, it is important to review warranties or guarantees that are offered. Maintenance agreements in which it is promised that a system will remain in operation, must be reviewed as well. It is always important to stay informed!