What would cover a loss caused by the malfunction of an AC unit after installation?

The completed operations section of a Commercial General Liability (CGL) policy is designed to cover claims arising from bodily injury or property damage that occur after a contractor has finished their work and the project has been turned over to the client. In the case of a malfunctioning AC unit, if the issue leads to damage after the installation is complete, this section of the CGL policy would provide coverage for the resulting loss.

This coverage is particularly important as it addresses potential liabilities that may arise long after the initial work is done, ensuring that contractors are protected against claims that could arise from defects in their work or materials, even once the job has been completed and the site turned over. The focus here is on liability for damages that occur due to the actions of the installer after they have fulfilled their contract.

In contrast, other options like a performance bond or materials and labor bond are not directly linked to product failure after installation. They primarily assure that specific contractual obligations will be met and protect against non-completion, not against operational failures of installed equipment. Though an installation floater could cover materials in transit or in-storage, it does not provide coverage for the contractor’s liability after the equipment has been installed and is in use.