Which statement correctly distinguishes general liability from products-completed operations liability and describes where defense costs typically fit?

Which statement correctly distinguishes general liability from products-completed operations liability and describes where defense costs typically fit?

• A. General liability covers injuries or property damage arising from ongoing operations; products-completed operations covers damage after products leave the insured's control; defense costs are often inside the limits unless stated otherwise.
• B. General liability covers injuries from completed operations; products-completed operations covers ongoing operations; defense costs are outside the policy limits.
• C. General liability excludes injuries to employees; products-completed operations covers employee injuries; defense costs are never included in limits.
• D. General liability covers all claims regardless of timing; products-completed operations covers only financial losses; defense costs are always paid separately from limits.

Answer: (A)

Understanding when each liability coverage applies helps distinguish these two: general liability covers injuries or property damage that arise from the insured’s ongoing operations, premises, or activities being performed now. Products-completed operations liability covers damage that occurs after a product has left the insured’s control, such as injuries or property damage caused by a product after it has been sold or a completed service is finished. Defense costs in typical liability policies come from inside the policy limits, meaning they reduce the amount available to pay judgments unless the policy specifically states defense costs are outside the limits. This combination—ongoing operations versus post-sale or post-service damage, and defense costs inside the limits—best reflects the correct distinctions.

Understanding when each liability coverage applies helps distinguish these two: general liability covers injuries or property damage that arise from the insured’s ongoing operations, premises, or activities being performed now. Products-completed operations liability covers damage that occurs after a product has left the insured’s control, such as injuries or property damage caused by a product after it has been sold or a completed service is finished. Defense costs in typical liability policies come from inside the policy limits, meaning they reduce the amount available to pay judgments unless the policy specifically states defense costs are outside the limits. This combination—ongoing operations versus post-sale or post-service damage, and defense costs inside the limits—best reflects the correct distinctions.