As a small business owner with many contractors as clients, I’ve learned that unexpected problems can drop a “completed” project right back on one’s plate. Imagine finishing a bathroom remodel, only to receive a call months later about a leaking pipe that has caused extensive water damage.
That’s one reason to consider additional insured completed operations endorsement, often referred to in contracts by its ISO form code, CG 20 37.
What This Endorsement Is
The additional insured completed operations endorsement is an add-on to your general liability policy. It’s not a separate policy, just an enhancement to your current coverage. It extends protections to others, like property owners or general contractors, for claims related to your finished work, such as leaks or faulty installations.
Why It Matters
For contractors, the work isn’t always over when the project ends. Months after finishing a kitchen remodel, a homeowner might notice flickering lights or an outlet that stops working. Or a property manager could make a claim about faulty wiring connected to an old HVAC job. These problems can turn into expensive disputes or even lawsuits if your name is on the contract.
The additional insured completed operations endorsement (CG 20 37) helps protect you and your clients from claims that might come up after a job is finished. Without this coverage, you could face lawsuits, project delays, or even miss out on future work with clients who require it.
Besides protecting you from financial risk, having this endorsement helps you meet contract requirements, since some clients ask for it. It also helps maintain client relationships and protect your reputation in your community.
What’s Covered vs. What’s Not
Like other endorsements, the additional insured completed operations add-on has clear limits. Knowing what is and isn’t covered can help you avoid confusion if you ever need to file a claim.
Covered:
- Third-party bodily injury or property damage claims that result from your completed work.
- Legal defense costs if a lawsuit is filed over damages tied to your completed operations.
Not Covered:
- The cost to repair or redo your own faulty workmanship (only the damage is covered).
- Intentional acts, fraud, or dishonest behavior.
- Employee injuries or workers’ compensation claims.
- Damage to your own tools, equipment or business property.
Say a painter finishes an interior job. Months later, peeling paint reveals hidden moisture damage that spreads to the drywall. The resulting property damage could be covered for the applicable additional insured / organization with this endorsement. However, the cost to redo the original paintwork itself would not.
Cost and Value
A claim or lawsuit filed after project completion can be expensive, with the median cost for a small business liability lawsuit hitting $54,000. Compared to that, additional insured completed operations coverage is affordable. For most contractors, this small investment can help you avoid big financial problems if a claim comes up months later.
Beyond just the dollars and cents, there’s value in peace of mind for the additional insureds and organizations that you work with.
How to Add It
Adding additional insured completed operations (or CG 20 37) coverage is simple. Most insurers can add it to your current general liability policy. Just request a few quotes, share your project and client details with your agent, and let them set up and customize the endorsement for you.
Many insurance companies let you manage your coverage online and connect you with advisors who understand contractor risks. This makes it easy to update your coverage and keep your projects moving forward.
Project Your Business Even After the Job is Done
For contractors, your reputation and relationships are key to long-term success. Taking the time to review your contracts and discuss this coverage with your insurance provider can help ensure your business stays protected long after a project wraps up.
To learn more, request a quote and speak with an insurance expert today. This way, you can make sure your business has the right coverage, and you can focus on your next job instead of worrying about old claims.