Mississippi Insurance Practice Test

The coverage that protects an auto repairman for not replacing an oil drain plug, which leads to engine damage, is completed operations liability. This type of liability coverage is designed to protect businesses for damages that occur after the work they have completed has been finished. In this scenario, the failure to replace the oil drain plug is an issue that occurs after the repair work was completed and results in damage to the vehicle.

Completed operations liability is part of a general liability policy and is essential for businesses like auto repair shops that perform services and may inadvertently cause harm to property as a result of their work. In cases where the work itself is done incorrectly, and that leads to damage, completed operations liability provides the necessary coverage to address claims arising from such incidents.