Decoding CGL Policy Exclusion for Boat Dealers

What does it mean if an exclusion for used vessels and equipment applies only to Products/Completed Operations coverage, not standard GL?

If a Products/Completed Operations exclusion for used vessels and equipment doesn't apply to the standard General Liability (GL) coverage, it means you are still covered for incidents involving those items that occur while the vessel or equipment is still in your possession or the project is ongoing, but not if those same issues arise after you've sold the product or finished the work. The exclusion, in this specific case, is limited to incidents that happen after the products have left your possession or your work is completed.

Here's a breakdown of the distinction:

• Standard GL Coverage (No Exclusion Here): This part of your policy covers incidents that happen during the project or while you are in control of your products. For instance:
  • If a piece of used equipment you are using malfunctions and injures someone while you're on the job.
  • If you are installing a used vessel, and it leaks, causing property damage to a third party's property while the installation work is still underway.
• Products/Completed Operations Coverage (Exclusion Applies Here): This coverage applies to issues arising from your product or work after it leaves your hands or is completed and put into its intended use.
  • If the used vessel you installed is still working but then causes damage a month later after the installation is complete, the exclusion means your insurance won't cover it.
  • Similarly, if a used product you sold malfunctions and causes damage after the sale and completion of the project, the exclusion removes coverage for that event.

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In essence: The exclusion limits your insurer's liability specifically for problems arising from those used items after they've been sold or the associated work is finished. You retain coverage for incidents involving those items occurring during the course of your business operations and while still in your possession or the project is ongoing.

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