Premises & Operations Liability

Premises and operations liability is the core exposure category within Coverage A of a commercial general liability policy. It responds to third-party bodily injury and property damage that arises from two things: the condition of the insured's premises (the building, parking lot, or space you own, rent, or occupy) and the insured's ongoing operations (the work your business is actively performing, whether on your own site or at a customer's location). A customer tripping on a torn mat, a visitor struck by a falling display, or a plumber's employee flooding a client's basement while working are all classic premises-and-operations claims.

For a small-business owner, this is the everyday, foot-traffic-and-jobsite coverage that most people picture when they think of "general liability." It matters because these routine incidents are common, and a single serious injury can generate defense costs plus a settlement that dwarfs annual premium. The coverage pays sums the insured becomes legally obligated to pay as damages, plus defense, up to the per-occurrence limit and the policy's aggregate. It is also the coverage most often extended to a landlord, general contractor, or client as an additional insured when a contract or lease requires it.

The key nuance is the boundary between ongoing and completed work. Premises and operations covers injury or damage that happens while operations are in progress; once a job is finished and turned over, a loss traceable to that completed work shifts to the separate products-completed operations hazard, which carries its own aggregate limit. Contractors especially need to confirm both parts are in force and properly limited, because dropping completed-operations coverage after a project ends can leave a large, delayed exposure uninsured. Both parts share the policy's aggregate limit structure.