# Completed Operations Coverage on Construction Projects URL: https://mycontractorsinsurancequote.com/project-specific-liability-insurance/completed-operations Updated: 2026-10-29 · Reviewed by the Principal, Gleason Insurance Brokers, LLC Publisher: My Contractors Insurance Quote, a website of Gleason Insurance Brokers, LLC Completed operations coverage is the part of a liability policy that may respond to bodily injury or property damage arising from finished work after it has been turned over. On a project, it is usually subject to its own aggregate, and the question that matters most is whether that protection lasts as long as claims can still be brought, which in California, Texas, Arizona and Nevada runs up to roughly a decade after substantial completion. ## Key Decision Points - Completed operations losses typically draw on a products-completed operations aggregate that is separate from the general aggregate. - A per-project aggregate endorsement on an annual policy may not dedicate completed operations limits to the project. - California's latent-defect repose period is 10 years; Texas is generally 10 years; Arizona is eight years for contract and implied warranty claims. - A project policy's completed operations term should be compared with the repose period that applies to the work. - Defect claims turn on property damage and policy wording, not on the defect alone. ## What Completed Operations Means in a Liability Policy Commercial general liability policies split construction exposure into two phases. Work that is still in progress belongs to ongoing operations. Once the work is finished, or put to its intended use, injury or damage arising from it generally falls within what the policy calls the products-completed operations hazard. The policy's own definition controls, and many forms tie completion to milestones such as finishing the contracted work or the work being put to its intended use. For a developer or GC, that hazard is where most long-tail exposure sits. A balcony that fails, a slab that heaves or a roof that leaks into units years after occupancy may all be presented as completed operations claims. Whether a policy responds depends on the trigger language, the policy in force when damage occurred and the exclusions on the form. Completed operations is one part of the broader structure of [project-specific general liability](https://mycontractorsinsurancequote.com/project-specific-liability-insurance). ## The Products-Completed Operations Aggregate Most construction liability policies carry two aggregates: a general aggregate for most claims and a products-completed operations aggregate for claims within that hazard. Every completed operations payment during the policy period reduces the second one, regardless of which project the claim came from. That is why a per-project aggregate endorsement on an annual policy can mislead. The ISO Designated Construction Project(s) General Aggregate Limit endorsement (CG 25 03, 05 09 edition) gives each scheduled project a separate aggregate for damages attributable only to ongoing operations at that project. It states that payments for injury or damage within the products-completed operations hazard reduce the products-completed operations aggregate instead. On an annual program, that aggregate is often shared by every project the contractor has ever finished. A project-specific policy can be written with a completed operations aggregate that belongs to the project alone. Ask whether the aggregate is dedicated to the project for the whole completed operations term or whether it reinstates, and on what basis, if the term spans more than one policy period. For what a longer term or a dedicated aggregate does to price, see [how the completed operations term and aggregate affect premium](https://mycontractorsinsurancequote.com/project-specific-liability-insurance/cost). ### Illustrative scenario: Condominium in Maricopa County A developer completes a four-story condominium in Maricopa County. The first owners move in at once, which under A.R.S. §12-552 can mark substantial completion even though a final punch list remains open. In the eighth year, the homeowner association discovers water intrusion at the podium deck and sues in contract and implied warranty. Because the defect was discovered in the eighth year, the association may sue within one year but no later than nine years after substantial completion. The developer's project policy carried a completed operations extension shorter than that window, so the defense falls to whatever annual policy is in force, if any. A term sized to the Arizona period at placement may have kept that claim inside the project program. ## How Long Claims Can Run in California California Code of Civil Procedure §337.15 bars actions for latent deficiencies in design or construction, and for property damage arising from them, more than 10 years after substantial completion. A latent deficiency is one not apparent by reasonable inspection. The statute includes indemnity actions, and it does not apply to claims based on willful misconduct or fraudulent concealment, or protect a person in possession or control of the improvement when the deficiency causes the damage. The 10-year clock starts at substantial completion, but no later than the first of four events: the final inspection by the public agency, recordation of a valid notice of completion, use or occupation of the improvement, or one year after work stops. For patent deficiencies, §337.1 sets a four-year period, extended to a five-year outer limit when injury occurs in the fourth year. For-sale residential work follows a separate track. Civil Code §941 sets a 10-year period for actions under the state's construction defect title and states that §337.15 and §337.1 do not apply to those actions. A California residential developer's completed operations plan is usually measured against that 10-year horizon. Tract and multifamily defect exposure is addressed further in our page on [residential general contractor insurance](https://mycontractorsinsurancequote.com/who-we-serve/residential-general-contractors). ## How Long Claims Can Run in Texas and Arizona Texas Civil Practice and Remedies Code §16.009 generally requires suits against a person who constructs or repairs an improvement to be brought within 10 years after substantial completion, for property damage, personal injury, wrongful death, contribution and indemnity. A governmental entity generally has eight years, with exceptions for TxDOT, highway-funded and civil works projects. For residences, the period drops to six years when the contractor provides a written warranty meeting the statute's minimum terms. A written claim presented within the period can extend it, and injury in the final year allows suit within two years of accrual. Section 16.008 applies a parallel 10-year rule to architects and engineers. Arizona's A.R.S. §12-552 bars contract and implied warranty actions against developers, designers and builders more than eight years after substantial completion. If injury occurs or a latent defect is discovered in the eighth year, the claim may be brought within one year, but never more than nine years after substantial completion. Substantial completion is the first of first use, availability for use or final inspection. The section does not apply to personal injury or death claims and does not shorten an express written warranty. Each statute has exceptions, including fraud or willful misconduct and parties in possession of the property. The repose period is a planning horizon, not a promise that no claim can arrive later. Whether those horizons argue for a dedicated policy is the subject of [relying on annual renewals or buying a project policy](https://mycontractorsinsurancequote.com/project-specific-liability-insurance/project-specific-gl-vs-annual-gl). ## Extended Completed Operations on Project Policies A project-specific policy is usually written for the construction period plus a completed operations extension. The length of that extension is negotiated, and carriers vary in what they will offer for residential, condominium and mixed-use work. The goal is to compare the extension with the repose period for the project's state and work type, then decide how much of the remaining exposure the developer or GC is willing to leave to future annual renewals. Ask how the extension is earned and paid for, whether it can be canceled once the premium is paid, whether limits reinstate during the extension and whether the excess layers carry the same term. An excess policy that ends earlier than the primary's completed operations extension leaves the top of the tower exposed for the later years. On wrap-up programs the same questions apply to the completed operations term of the enrolled policy. Enrolled contractors face the same duration questions under [completed operations on OCIP and CCIP programs](https://mycontractorsinsurancequote.com/wrap-up-insurance). ## Construction Defect Exposure and How Policies Respond A defect alone is not usually what a liability policy responds to. Most forms are written around bodily injury or property damage caused by an occurrence, so the cost of repairing faulty work itself may be treated differently from damage that the faulty work causes to other property. Courts in each state have addressed how these terms apply, and the answer can depend on the facts and the policy language. Exclusions shape the result as much as the insuring agreement. Look for the damage to your work exclusion and whether it carries the subcontractor exception, continuing or progressive damage language, earth movement and subsidence exclusions, and residential or condominium restrictions. A completed operations term is only as valuable as the exposures the form leaves in place. Developers should also consider how warranty programs and homeowner association turnover interact with the liability program, because a warranty obligation and an insured claim are not the same thing. Project-type defect patterns are discussed on our page for [residential and multifamily construction projects](https://mycontractorsinsurancequote.com/projects/residential-construction). ## Before You Ask for a Quote ### What to Gather - The expected substantial completion date and how it will be documented - Whether the project is for-sale residential, rental or commercial - The quoted completed operations term for the primary and each excess layer - The products-completed operations aggregate amount and whether it is dedicated to the project - Any per-project aggregate endorsement on the contractor's annual policy - Warranty documents and homeowner association turnover plans ### What to Ask the Insurer or Surety - Is the completed operations aggregate dedicated to this project for the full term? - How long is the completed operations extension, and is it non-cancellable once paid? - Do the excess layers carry the same completed operations term as the primary? - Does the damage to your work exclusion keep the subcontractor exception? - Are there continuing damage, earth movement or condominium exclusions? - How would the policy treat a claim first made after the extension ends? ## Broker Notes **Quick Answer:** Completed operations coverage may respond to injury or damage arising from finished work. It usually has its own aggregate, and its term should be compared with the state repose period: ten years for latent defects in California, generally 10 in Texas and eight in Arizona for contract claims. **Common Mistake:** Relying on a per-project aggregate endorsement for post-turnover claims. The ISO endorsement dedicates the aggregate to ongoing operations; completed operations claims typically reduce a shared aggregate. **Broker Perspective:** A broker matches the completed operations term on every layer to the repose period that applies to the work, then reads the defect-related exclusions before comparing terms. **Coverage Impact:** A short extension or an excess layer that ends early can leave later-year defect claims to whatever annual policies happen to be in force. ## Questions Buyers Ask ### When does completed operations coverage start on a construction job? It depends on the policy definition. Many forms tie completion to milestones such as finishing the contracted work or the work being put to its intended use, so partial occupancy may move part of a project into the completed operations phase before the rest is finished. Read the definition on the quoted form. ### How many years of completed operations protection does a California developer need? There is no single answer, but the planning horizon is usually 10 years. Code of Civil Procedure §337.15 sets 10 years for latent deficiencies, and Civil Code §941 sets 10 years for actions under the residential construction defect title. Exceptions exist, so the term chosen is a risk decision made with counsel and the broker. ### Can a Texas homebuilder shorten the repose period with a warranty? Texas Civil Practice and Remedies Code §16.009 provides a six-year period for residential claims when the contractor gives a written warranty meeting minimum terms: one year for workmanship and materials, two years for plumbing, electrical and HVAC delivery systems and six years for major structural components. Counsel should confirm the warranty meets the statute. ### Why did a defect claim hit the aggregate of my company's annual policy instead of the project? If the project aggregate came from a designated construction project endorsement, it likely applied only to ongoing operations. Under the ISO wording, completed operations payments reduce the products-completed operations aggregate shown on the declarations, which an annual policy usually shares across all finished work. ### Does Arizona's eight-year statute cover injury lawsuits after a project is finished? A.R.S. §12-552 applies to contract and implied warranty actions and states that it does not apply to personal injury or death claims. Injury claims after completion follow other rules, so an Arizona completed operations plan should not assume the eight-year period caps all exposure. ## Official Sources 1. [Cal. Code Civ. Proc. §337.15 (latent deficiency repose)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CCP§ionNum=337.15), California Legislative Information. Ten-year period from substantial completion for latent deficiencies; includes indemnity actions; start-date triggers; willful misconduct and possession exceptions. Verified 2026-10-23. 2. [Cal. Code Civ. Proc. §337.1 (patent deficiency limitation)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CCP§ionNum=337.1), California Legislative Information. Four-year period for patent deficiencies, five-year outer limit for fourth-year injury. Verified 2026-10-23. 3. [Cal. Civil Code §941 (residential construction defect actions)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV§ionNum=941), California Legislative Information. Ten-year period for Title 7 residential actions; §337.15 and §337.1 do not apply to them. Verified 2026-10-23. 4. [Tex. Civ. Prac. & Rem. Code §16.008 and §16.009 (construction repose)](https://statutes.capitol.texas.gov/Docs/CP/htm/CP.16.htm), Texas Legislature (Texas Constitution and Statutes). Ten-year period; eight years for governmental entities with exceptions; six-year residential period with compliant warranty; written-claim extension; final-year injury rule; exceptions. Verified 2026-10-23. 5. [A.R.S. §12-552 (actions involving real property development, design and construction)](https://www.azleg.gov/ars/12/00552.htm), Arizona State Legislature. Eight-year period for contract and implied warranty actions; eighth-year discovery rule with nine-year cap; substantial completion definition; personal injury exclusion. Verified 2026-10-23. 6. [ISO CG 25 03 05 09, Designated Construction Project(s) General Aggregate Limit (form text as published in a state contract exhibit)](https://ogs.ny.gov/spc-exhibit-21), New York State Office of General Services. Products-completed operations payments reduce the products-completed operations aggregate, not the designated project aggregate. Verified 2026-10-23. ## Related Decisions - [project-specific liability insurance](https://mycontractorsinsurancequote.com/project-specific-liability-insurance) - [subcontractor risk transfer documentation](https://mycontractorsinsurancequote.com/resources/completed-operations-and-subcontractor-work) - [developer and subdivider insurance](https://mycontractorsinsurancequote.com/who-we-serve/developers-subdividers) - [project risks by construction phase](https://mycontractorsinsurancequote.com/resources/project-risks-by-construction-phase) --- Start a quote request: https://mycontractorsinsurancequote.com/get-a-quote · Call 844-978-7283 Contract and insurance reviews are a courtesy service that may be available at times, depending on our workload and on the size, timing and complexity of the project. A review is not guaranteed and is limited to insurance considerations. It is not legal advice and is not a substitute for advice from your own legal counsel, which you may need before signing a contract or obtaining coverage. Insurance and surety services are provided through Gleason Insurance Brokers, LLC. Site information is educational and does not constitute legal advice, a binder, an offer of coverage, a guarantee of eligibility or confirmation of policy terms. Insurance conditions are governed by actual issued policies; surety rights and obligations are governed by bond and indemnity documents.