Like all other businesses, electrical service providers need to have commercial insurance, and first among your policies should be general liability coverage. This is insurance that applies when you make mistakes that cause harm to someone or something else. Since your business’s purpose is to provide repairs to someone’s electrical system, then your goals must be to ensure that you do the work successfully and that you ensure the long-term reliability of the project. If you were to fail in this duty, then you might need to turn to a special type of liability insurance, called completed operations coverage, that might be able to help you out when something goes wrong.
What’s liability insurance?
To run a business, you have to serve others in some way, shape or form. That means you might occasionally make a mistake that, however unintentional, could harm someone else. Because those parties certainly didn’t expect a problem to occur, then the accident might be your fault. As a result, the damage might be your responsibility to repair.
In these cases, liability insurance can step in to help you cover the costs of the harm you do to others. Most businesses need at least a commercial general liability policy, which provides the most essential coverage needed by most business owners. Often, the policy contains coverage for third-party bodily injuries and property damage.
Ideally, this coverage can step in to cover the business in any number of accidents, such as when a client slips and falls in your store, and gets hurt. The CGL policy might compensate that person for their medical bills and damage done to their belongings in the accident. It can help the business avoid having to pay for these losses out of pocket. It can also help the business owner cover associated legal fees that might arise if the affected party sues them.
However, business-related accidents might result not only occur in the moment. Sometimes, the business might provide a service or a product that could cause harm to others later. That’s why many policies contain coverage called products/completed-operations, which applies when the work you do comes back to cause a problem for others.
How does completed operations insurance work?
Products and completed-operations liability policies are often very similar, and many insurers cover them under the same or similar terms. Usually, this coverage is included as part of a general liability policy. They help businesses when the business’s projects or products cause property damage or bodily harm to other people.
Food-borne illnesses occurring in restaurants are often good examples of how this coverage works. If you serve someone food, which proceeds to make them sick, then you provided them with a product that subsequently caused them harm. Therefore, you might have to compensate them.
What does it mean for your electrical business?
Electricians often need completed-operations policies in their line of work. It’s important to have because the work you do isn’t something you’ll check on every day. It’s a project you will finish, and then you will go on to another project. If the work subsequently fails, and that results in liability damages, then you might be on the hook for the recovery costs.
For example, you might rewire someone’s kitchen, but you make a mistake in the process that causes the system to become overloaded. This results in a fire breaking out, which damages the individual’s home. As a result, that person might hold you responsible for the damage you caused them, and therefore, you might have to compensate them for the repairs their household will need.
Speak to your insurance agent at (817) 563-5555 about the way that your completed operations coverage can benefit you in your electrical business. They can help you understand the times when this coverage will or will not cover your mistakes.
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