1. Forms
2. CG
3. CG-00-38

What the form is

The CG 00 38 Products/Completed Operations Liability Coverage Form (Claims-Made Version) is an insurance policy form developed by the Insurance Services Office (ISO) that provides dedicated coverage for liabilities arising from an insured's products or completed work. Unlike an occurrence form, coverage under this claims-made form is triggered when a claim for damages is first made against an insured during the policy period or any applicable extended reporting period, provided the injury or damage occurred after the retroactive date stated in the policy. This form is typically used when a business's products or completed operations exposures are excluded from their standard Commercial General Liability (CGL) policy (often through an endorsement like CG 21 04) and are insured separately. It contains its own insuring agreement, exclusions, conditions, and limits of insurance, separate from the CGL.

Classes of business it applies to

This form is suitable for a wide range of commercial enterprises, particularly those with significant exposures related to products they manufacture, sell, or distribute, or work they have completed. Examples include:

• Manufacturers: Companies producing goods where defects could lead to injury or damage (e.g., machinery, consumer products, building materials).
• Contractors: Businesses whose completed work could later cause harm (e.g., construction, plumbing, electrical work). For instance, if a new roof installed by a contractor collapses a year after completion causing damage, this form (if in effect when the claim is made and the occurrence was after the retroactive date) would respond.
• Distributors and Retailers: Businesses involved in the sale or distribution of products, especially if they face direct liability for those products.

It is often utilized when insurers are hesitant to include these specific, sometimes high-hazard, exposures under a standard CGL form.

Special considerations

• Claims-Made Nature: The claims-made trigger is a critical aspect. Insureds must understand the importance of the retroactive date, which limits coverage for incidents occurring before that date. Continuity of coverage is vital to avoid gaps.
• Extended Reporting Periods (Tail Coverage): If the policy is cancelled, non-renewed, or replaced with an occurrence form, an Extended Reporting Period (ERP or "tail coverage") is crucial to cover claims made after the policy period for incidents that occurred after the retroactive date and before the policy ended. Endorsements like CG 27 05 may be used in relation to specific extended reporting needs.
• Separate Aggregate Limit: The Products/Completed Operations hazard typically has its own aggregate limit of insurance, distinct from the general aggregate limit in a CGL policy.
• Exclusions: Like the standard CGL, this form contains various exclusions. The April 2013 edition, for example, included revisions to the liquor liability exclusion.
• Worldwide Coverage (with limitations): Coverage applies to bodily injury or property damage occurring within the coverage territory (typically the U.S., its territories, Puerto Rico, and Canada). For products, coverage can extend worldwide if the goods were made or sold by the named insured in the coverage territory, and the insured's responsibility is determined in a lawsuit filed within that territory. However, this does not typically suffice for insureds marketing products for foreign markets, who would need specific foreign products liability coverage.

Key information for agents and underwriters

• Risk Assessment: This form allows for focused underwriting of the often higher-risk products and completed operations exposures. Underwriters will scrutinize the nature of the products, the quality control processes, historical claims data, and the type of completed work.
• Pricing: Premiums will reflect the specific hazards associated with the insured's products or completed work. The claims-made nature might initially result in lower premiums compared to an occurrence form, but this can change as the policy matures and potential for claims increases.
• Coverage Gaps: Agents must counsel clients on the implications of a claims-made policy, particularly regarding retroactive dates and the necessity of purchasing tail coverage or ensuring prior acts coverage if switching carriers or policy forms.
• Coordination with CGL: When this form is used, it's essential to ensure the main CGL policy properly excludes products/completed operations to avoid overlaps or disputes. Endorsement CG 21 04 is commonly used for this purpose on the CGL.
• Endorsements: Various endorsements can modify this coverage form, such as those for deductibles (e.g., CG 03 00), adding additional insureds for volunteer workers (e.g., CG 34 07), or pollution exclusions (e.g., CG 21 98).