Most founders think about liability in terms of what happens while their product or service is in use. But what about after it's delivered, installed, or deployed?

That's where Products-Completed Operations coverage comes in. Over the past five years, defective products have accounted for more than 40% of total liability claim value, making them one of the costliest sources of risk for businesses. At the same time, product liability case filings have surged by 89%, jumping from just over 3,000 in 2015 to nearly 6,000 in 2022.

For companies moving quickly—especially those shipping hardware, deploying connected devices, or entering new markets—these represent real risks that can stall growth, consume capital, and strain relationships with investors, partners, and customers.

What Is Products-Completed Operations Coverage?

Products-Completed Operations coverage is a core part of most General Liability Insurance policies, acting as a layer of protection for any company that builds, ships, installs, or supports a product that could cause damage or harm after the fact.

It kicks in after your product is out in the world or your work is complete. If something goes wrong (e.g., a battery explodes, a finished installation causes water damage, or a software bug leads to physical harm), you could still be liable.

It's often overlooked but frequently required by large enterprise customers, partners, or landlords in contracts and vendor agreements. Most companies don't realize they have—or need—this coverage because it's typically baked into your General Liability Insurance policy, so it doesn't always stand out.

What Products-Completed Operations Coverage Actually Covers

At its core, this coverage steps in after your work is finished or your product is out in the world. It’s designed to protect your business from risks that don’t appear until after delivery, when customers or end-users interact with what you’ve built.

Bodily Injury or Property Damage from a Product or Service

This coverage protects you from the impact of your product or service once it's in use. With more than 15 million injuries treated annually in U.S. emergency departments due to consumer products, the potential liability exposure is substantial.

Examples:

• A smart thermostat malfunctions after installation and causes a fire
• A hardware component you shipped overheats and damages a customer's equipment
• A software tool controls a physical device that injures someone due to a bug
• A connected device experiences a security breach that leads to physical harm

In each case, the damage happens after the job was done or the product was delivered. But your company is still potentially on the hook. That's what this policy is designed to cover.

Key Exclusions to Know

There are a few important limits to what this coverage includes:

• It doesn't pay to repair or replace your faulty product itself
• It doesn't cover financial losses caused by bad advice (that's what Errors & Omissions Insurance is for)
• It doesn't apply to intentionally unsafe or knowingly defective products

In other words, this isn't product warranty or professional liability, but third-party liability coverage for the physical consequences of your work.

Why You Need Products-Completed Operations Coverage

As your product footprint grows, so does your exposure. Without the right coverage, a single post-delivery incident can trigger expensive legal claims that your business may not be ready to absorb. Liability doesn't end when the contract is signed or the product ships, but often starts there.

How It Fits Into Your Overall Risk Strategy

If you have a General Liability Insurance policy, you likely already have this coverage. It's typically included, but with its own limit, listed as the "Products-Completed Operations aggregate" on your declarations page.

It's worth checking that limit against your actual risk exposure, especially if you're:

• Shipping more product units
• Taking on larger contracts
• Moving into regulated markets or environments
• Scaling into enterprise accounts

When You Need This Coverage

You Sell or Ship a Physical Product: If you manufacture or distribute any kind of physical item (e.g., electronics, wearables, consumer devices), this coverage is essential. Even if you're not the original manufacturer, you could still be pulled into a claim as part of the distribution chain.

You Build, Install, or Deploy Something: Construction tech, Internet of Things (IoT) companies, or any company that puts hardware or infrastructure into the field should double-check this coverage. If your completed work causes damage days, weeks, or months later, you're likely liable for the consequences.

Your Software Could Impact the Physical World: Yes, even software companies need to think about this. The rise in IoT-related class action lawsuits shows that if your app integrates with smart devices, controls machinery, or automates processes that affect people or property, a bug or failure could result in physical harm.

Connected device manufacturers face increasing scrutiny over everything from security breaches to device malfunctions. If your software connects to the physical world in any way, General Liability Insurance becomes relevant.

The Financial Stakes Are Higher Than Most Realize

This is especially true for companies building physical tech, operating in the real world, or scaling fast. The bigger your footprint, the more likely it is that something could go wrong after the fact—and that someone could hold you responsible.

With product liability filings nearly doubling in recent years and defective products driving the highest claim values, Products-Completed Operations coverage is meant to protect your business from potentially catastrophic financial exposure.

Covering What Comes After Delivery

Most insurance decisions focus on what might happen during day-to-day operations. But Products-Completed Operations coverage protects you from what happens next, from claims that surface well after you've shipped the product or wrapped the job.

For companies with any exposure to physical goods, installation work, or real-world impact, this is an important part of your risk strategy. And because it's usually included in your General Liability Insurance policy, all it takes is a quick check to make sure your coverage limits align with your exposure.

Vouch Specialty Insurance Services, LLC (CA License #6004944) is a licensed insurance producer in states where it conducts business. A complete list of state licenses is available at vouch.us/legal/licenses. Insurance products are underwritten by various insurance carriers, not by Vouch. This material is for informational purposes only and does not create a binding contract or alter policy terms. Coverage availability, terms, and conditions vary by state and are subject to underwriting review and approval.