Are You Certain Your CGL Policy Covers Both Completed and Ongoing Operations?

It’s likely worth a double check, and it may be as simple as which form endorsement your policy includes.
Most contractors have a standard practice for obtaining additional insured status under other parties’ liability policies.  In addition, it is standard practice for parties who are additional insureds under another entity’s liability policy to require that the additional insured status extend to completed operations. This practice protects the contractor and owner from losses that occur during the course of construction, as well as claims arising out of the completed project (damages found after the project is completed).
Standard policy form endorsements are frequently used for fulfilling contractual obligations to provide additional insured coverage.  These form endorsements are promulgated by Insurance Services Office, Inc., commonly referred to as the ISO.  Many insurers use the standard endorsements or ones closely mirroring the ISO forms.  ISO’s standard policy forms have progressively narrowed the coverage provided for additional insureds; and therefore, careful consideration must be given to understanding the form endorsement your CGL policy includes.
The original ISO CG 2010 endorsement (11/85 version), the broadest version of the CG 2010 endorsement, provided additional insured coverage for liability “arising out of” some aspect of the named insured’s operations.  The CG 20 10 11 85 intended to provide additional insured status for entities specifically named in a schedule to the CGL policy and the endorsement and provides coverage for both ongoing and completed operations for any liability arising out of the insured’s work.
In 1993, the ISO revised their additional insured endorsements, resulting in change to the coverage provided to additional insureds.  Specifically, ISO removed the “your work” reference. This change ruled out the additional insured claims for completed operations. ISO amended their additional insured endorsement to apply only to the liability arising out of the contractor’s “ongoing operations” for the additional insured.  These changes resulted in a huge gap of coverage.  In 2010, ISO responded to this gap by developing an additional insured form (Form CG 20 37) that specifically provided coverage for completed operations.
To be certain your policy covers both ongoing and completed operations, you should evaluate the endorsements themselves.  While a CG 2010 11 85 will cover both completed and ongoing operations, if the insurer issues a more recent version of CG 2010, then you will also require a CG 20 37 endorsement to achieve equivalent coverage.
If you are currently negotiating a contract and have questions related to the agreement’s requisite coverage or are now attempting to recover under a policy and are unsure of whether completed operations are covered, do not hesitate to contact our office.
By: Betsy Huffman