Say a Texas remodeler wraps up a kitchen and bath job in the spring. The final check clears and the crew moves on. Fourteen months later a water supply fitting behind a cabinet lets go while the family is out of town, and by the time anyone notices, the floor and the room below are soaked.
The homeowner's own insurer pays for the damage and then turns to the contractor to recover what it spent. The remodeler has no crew on that site, no open contract and no memory of that fitting, but the claim is still his. The part of a commercial general liability policy built for this moment is called products-completed operations coverage. It pays for bodily injury or property damage caused by finished work, provided your policy includes it and no exclusion takes it away. Forms and wording vary by carrier.
That insurer's right to recover what it paid is called subrogation, and some contracts ask the contractor to give it up in advance. If one of your contracts has that clause, read
what a waiver of subrogation actually gives up before you sign, because it changes who ends up holding a loss like this one.
Ongoing work versus finished work
A general liability policy treats your risk in two phases. Ongoing operations covers injury or damage while you are still working, such as the ladder that falls or the saw that cuts a gas line. Completed operations picks up after the job is finished, which most forms define as the point when all the work in the contract is done, or when the owner puts the work to its intended use.
Punch-list visits and small warranty fixes generally do not reopen a finished job for this purpose. The practical meaning is that the day you hand over the keys, your exposure does not end. It changes from a jobsite risk into a long tail risk that follows the work for years.
Which policy answers when the damage shows up later
Most contractors carry an occurrence policy, which responds to the policy in force when the injury or damage happened, not the one in force when the work was done. A failure this year is a claim against this year's policy, even if the work dates back several years. That is good news for anyone who keeps coverage in place without a break.
Some policies are written on a claims-made basis instead. There, the policy must be active when the claim is first made, and a retroactive date, meaning the earliest date from which your work is covered, decides what counts. Move to a new carrier on a claims-made form with a late retroactive date and you can lose coverage for work you did years ago without anything on the page looking wrong.
Slowly developing damage adds a wrinkle. A hidden leak that began under one policy year and kept getting worse can start an argument over which year's policy owes the claim, and carriers sometimes treat damage already underway at the start of a policy differently. It is one more reason to avoid gaps between policies.
What the contract asks for after you leave
Owners and general contractors often require completed operations coverage to stay in force for a stated number of years after the project ends, with them named as additional insured for it. Ongoing and completed operations endorsements are separate items, and a certificate that shows only one of them can fail the contract.
Limits matter too. Many forms carry a separate aggregate for products-completed operations, and a contract that demands a high limit may need an excess layer on top, as we walked through in our post on
how a small contractor reaches a high liability limit. Ask whether the excess policy follows the completed operations coverage of the primary policy or stops at the jobsite.
Where the coverage gets taken away
Completed operations coverage is not automatic just because you carry general liability. Some low-cost programs limit or leave out the products-completed operations hazard, and carriers often add exclusions for particular kinds of work, such as condominium or tract-home construction, exterior finish systems, or mold and earth movement.
The exclusion that surprises people most is the one for your own work. A standard policy is aimed at the resulting damage to other property or other people, not at tearing out and redoing your faulty work. In the remodeler's case, the policy points at the flooded floor and the room below, not at the fitting itself. Many forms soften that exclusion when a subcontractor did the work on your behalf, so who actually did the work matters.
The risk of stopping coverage
The costly mistake is dropping general liability when work slows down or the business winds down. With an occurrence form, a policy only answers for damage that happens while it is active, so once the policy ends, new damage from your old work has nothing behind it.
Texas generally sets an outer time limit on suits over improvements to real property, known as a statute of repose, commonly cited as ten years from completion. That is a ceiling, not a comfort. A claim can still arrive in year eight, and the limit has its own exceptions, so confirm how it applies to your work with a Texas attorney.
Five questions to settle before you renew or switch
Is it on the policy? Ask for the declarations page and endorsements, and look for products-completed operations coverage, its limit and its aggregate.
Occurrence or claims-made? If it is claims-made, get the retroactive date in writing and ask what an extended reporting period costs. That is a window to report claims after the policy ends.
What is carved out? Read the exclusions for your type of work, especially residential, exterior finish and subsidence language.
What do your contracts require? Compare the completed operations years and endorsements in each contract with what your certificate actually shows.
What happens if you stop? Decide before your last job whether you will keep a policy running afterward, and for how long.
None of this takes a law degree, only a policy read slowly while no claim is pending. As an independent agency, TAP Insurance Agency can read your general liability form with you, compare it with the contracts on your desk and shop carriers that handle your trade, and you can
request a contractor liability quote whenever you are ready.
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Educational only; coverages and availability vary by carrier. TAP Insurance Agency, PLLC — Rhome, TX, licensed in Texas and Oklahoma.
