Completed Operations: Three Line Items and an Additional Insured Tender
Summit Mechanical holds an occurrence-form CGL (CG 00 01) with each occurrence $1,000,000, general aggregate $2,000,000, products-completed operations aggregate $2,000,000, and a $5,000 per-occurrence deductible. In June 2023 Summit installed a boiler and riser piping in a 12-unit apartment building and completed the job; the owner paid in full. In March 2024 a joint on Summit's riser split and flooded three floors: $180,000 to the owner's drywall, flooring, and tenant improvements; $25,000 to a tenant's furniture; and $40,000 to tear out and replace Summit's own piping and boiler. The building owner also tenders a suit naming itself as an additional insured under Summit's policy and demands a defense. Summit renewed with the same carrier, same terms, on January 1, 2024.
1. Which policy period responds, and is the loss charged to the general aggregate or the products-completed operations aggregate?
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The 2024–2025 policy responds. On an occurrence form there is no reporting deadline; the trigger is the property damage, not the negligent installation or the date of suit. The damage happened in March 2024, inside the current policy period, even though the work was done in 2023.
Products-completed operations aggregate, not the general aggregate. Summit's work was finished and put to its intended use before the policy period began, so the loss falls within the products-completed operations hazard. That matters because the PCOH carries its own $2,000,000 aggregate; the loss does not erode the general aggregate available for ongoing-operations claims.
One caveat worth flagging: if evidence showed the joint was leaking or damage was progressing during the 2023 policy period, a continuous or multiple-trigger analysis could bring the prior year in. Notice to the carrier should be prompt regardless - late notice only defeats coverage if the carrier is prejudiced.
2. Analyze each of the three damage items. What is the covered total after the deductible?
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$180,000 - owner's drywall, flooring, tenant improvements: COVERED. Physical damage to property other than the insured's own work, caused by an occurrence. This is the classic subcontractor-defect/general liability distinction.
$40,000 - tear out and replace Summit's piping and boiler: EXCLUDED. Exclusion j.(5)/(6) bars damage to that specific part of the property on which the insured performed operations, and bars damage to 'your work' included in the products-completed operations hazard. Repairing your own defective work is a cost of doing business, not a liability claim.
$25,000 - tenant's furniture: COVERED. It is tangible property of others, it is not the insured's work, and the care/custody/control exclusion does not apply because Summit finished the job months earlier and controls nothing in the building now.
Math: $180,000 + $25,000 = $205,000, less the $5,000 per-occurrence deductible = $200,000, well inside the $1,000,000 occurrence limit and charged against the $2,000,000 PCOH aggregate.
3. The building owner demands a defense as an additional insured. How should the carrier respond?
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It depends entirely on which additional insured endorsement was issued, and the answer is usually no for this loss.
- Blanket ongoing-operations endorsements (CG 20 10, CG 20 33) grant status only for liability arising out of the named insured's ongoing operations performed for the additional insured. Summit's operations were complete before the loss, so the owner is not an additional insured for a completed-operations claim. The tender should be declined.
- CG 20 37 (additional insured - completed operations) must have been purchased to change that outcome. Check the endorsement schedule in the policy, not the certificate.
Two further points: even where AI status exists, the AI receives coverage for its liability, not first-party coverage for damage to its own building, and the policy exclusions - including the 'your work' exclusion - apply to the additional insured as well. Finally, the certificate of insurance is not the policy; if the certificate promised AI status the endorsement never granted, that is an errors-and-omissions exposure for the producer who signed it.