Ryan,
I'm a little late to this discussion. Kyle is correct. Warranty work that extends to the life of the project is accounted for under "operations" as opposed to "project." In a real setting, a business making a widget will perform testing on the widget to fine the mean time between failures, and then make a decision based on that information to determine if they need an insurance policy or just absorb the cost of replacing or repairing the widget. That is built into the price of the widget.
Harry