Products-completed operations

Q: What are the claim limits for products-completed operations coverage?

Your policy has both per-occurrence and aggregate limits . This means payment for a single incident will not exceed the per-occurrence limit and the payout for all claims and incidents will not exceed the products-completed operations aggregate limit . Is there always protection available under this coverage? Insurers do not pay for all types of property damage under products and completed operations coverage. Three specific types are excluded: Damage to the product you sold to the customer: If the product you provided gets damaged, your policy would exclude coverage because it only applies to damage your product caused to your customer’s property or injury. Damage to a completed service: This is similar to the prior exclusion. The insurer would provide no coverage in cases where the damage occurred to your completed work, not to another piece of customer property. Damage to “impaired property”: This refers to customer property that has flaws or is unusable because it incorporates your defective product or service. If removing your product or service would restore the customer’s property to its original working condition, then your policy would provide no coverage for this loss.

Products-completed operations is a form of insurance coverage that protects you from customer lawsuits alleging property damage or injury due to your product or completed service.

What is products-completed operations coverage?

Products-completed operations (PCO) coverage protects your small business if a product you sell or work you complete later causes bodily injury or property damage to someone else.

This coverage is a core part of general liability insurance and is especially important for businesses whose products or services can cause harm after the job is finished or the product leaves their control.

Products-completed operations coverage helps pay for legal defense costs, settlements, and judgments if your business is held responsible for injury or damage caused by:

A product you sold or manufactured
Work you completed, after it’s been finished and delivered

In simple terms, it covers what happens after the sale or job is done.

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When does products-completed operations coverage apply?

This coverage applies only after one of the following has happened:

A product has been sold, delivered, or distributed to a customer
A service or installation has been completed and you’ve left the jobsite

It doesn't apply to incidents that happen while you’re actively working or while a customer is on your premises—those are typically covered under other parts of general liability insurance.

When this coverage is likely to protect your business

If your product or completed work causes damage later—not while you’re still on the job—products-completed operations coverage may help. These examples show situations where small business owners are often protected:

A contractor installs shelving, and weeks later it collapses, damaging a customer’s property
A landscaper installs an irrigation system that later malfunctions and floods a yard
A small business sells handmade candles, and a defect causes a fire in a customer’s home
A cleaning company finishes a job, but residue left behind damages flooring days later

These are classic products-completed operations scenarios because the damage occurs after the work is complete or the product is sold.

What isn't covered by PCO coverage?

Just as important, there are situations where this coverage doesn't apply. These examples help clarify where products-completed operations protection ends:

A customer slips and falls while you’re still working on-site
Your product breaks or malfunctions but doesn’t cause bodily injury or property damage
You discover cosmetic defects or poor workmanship with no third-party damage
You intentionally cause harm or act fraudulently

Understanding these distinctions helps avoid unpleasant surprises during a claim.

Who needs products-completed operations coverage?

This coverage is especially important for small businesses that:

Sell or distribute physical products
Install, repair, or build anything
Perform services that affect client property
Manufacture, assemble, or modify products
Operate part-time, seasonally, or from home

Common examples include contractors, cleaners, landscapers, consultants who install equipment, online sellers, artisans, retailers, distributors, and manufacturers.

If your work or products don’t end when you walk away, this coverage matters.

What are the benefits of products-completed operations coverage?

Products-completed operations coverage delivers many essential benefits, including:

Protecting company assets in the event a customer sues you to recover the costs of property damage or bodily injury
Preventing business failures or bankruptcy when your assets are insufficient to cover a legal judgment
Providing evidence of financial strength to help close business deals
Satisfying banker expectations to fulfill your obligations to them
Providing peace of mind to customers that you will make them whole in the event your product or service hurts them or damages their property

How are claims filed under products and completed operations?

There are three required criteria to receive this benefit:

Your customer must file a claim against you for bodily injury or property damage.
The claim must link the asserted loss to your product or completed service.
The property damage or injury must have happened after your product was no longer in your facility or possession, or after you completed the service.

What does products-completed operations coverage pay for?

If a covered claim occurs, this insurance can help pay for:

Legal defense costs
Settlements or court judgments
Medical expenses related to bodily injury
Repairs or replacement for damaged third-party property

Legal costs alone can be financially devastating for a small business, even if the claim is unfounded.

What are the claim limits for products-completed operations coverage?

Your policy has both per-occurrence and aggregate limits. This means payment for a single incident will not exceed the per-occurrence limit and the payout for all claims and incidents will not exceed the products-completed operations aggregate limit.

Is there always protection available under this coverage?

Insurers do not pay for all types of property damage under products and completed operations coverage. Three specific types are excluded:

Damage to the product you sold to the customer: If the product you provided gets damaged, your policy would exclude coverage because it only applies to damage your product caused to your customer’s property or injury.

Damage to a completed service: This is similar to the prior exclusion. The insurer would provide no coverage in cases where the damage occurred to your completed work, not to another piece of customer property.

Damage to “impaired property”: This refers to customer property that has flaws or is unusable because it incorporates your defective product or service. If removing your product or service would restore the customer’s property to its original working condition, then your policy would provide no coverage for this loss.

How this coverage fits into your insurance strategy

Products-completed operations coverage works best as part of a broader protection plan:

General liability insurance: Often includes PCO coverage by default
Product liability insurance: May be needed for businesses with higher product risk
Professional liability / errors and omissions (E&O) insurance: Covers financial losses from mistakes or advice, not physical damage
Commercial umbrella insurance: Adds extra protection if a large claim exceeds your limits

An Insureon agent can help you determine whether your current coverage is sufficient.

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Updated: January 8, 2026

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