The Safety Net
Understanding Umbrella/Excess Insurance
Our coverage
Who stands under Umbrella/Excess Insurance? Businesses facing high liability risks and contractors needing extra coverage beyond standard policies
Umbrella or Excess Liability Insurance
Umbrella/Excess Liability Insurance extends beyond the limits of your primary liability policies, offering an additional layer of protection. It safeguards against large-scale financial liabilities that surpass your existing coverage, ensuring one significant claim doesn’t destabilize your business financially.
Umbrella/Excess Liability Insurance isn’t just for large corporations—it’s essential for businesses of all sizes, from small contractors to major construction firms. It provides an extra layer of protection, ensuring that a single large claim doesn’t jeopardize financial stability. This coverage is particularly important for general contractors, specialty trade workers (electricians, plumbers, HVAC), heavy construction operators, roofers, landscapers, masonry professionals, and excavation experts.
Why get Umbrella/Excess Liability Insurance?
For contractors, the job comes with risks that can lead to costly liability claims. While standard policies provide protection, they may not always be enough—that’s where Umbrella Insurance steps in. It adds an extra layer of financial security, offering peace of mind against large claims, and is often more affordable than increasing the limits of individual policies. This coverage also safeguards both personal and business assets, preventing a lawsuit from turning into financial ruin. Plus, as your business grows, so do the risks, making Umbrella Insurance a smart, scalable solution that enhances credibility and can even make your business more attractive to potential clients.
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What is Umbrella Insurance, and how does it work?
Umbrella Insurance provides extra liability coverage beyond the limits of your primary policies, such as General Liability, Auto Liability, and Employer’s Liability (Workers’ Comp). It kicks in when your base policy limits are exhausted, offering an extra layer of financial protection.
What’s the difference between Umbrella Insurance and Excess Liability Insurance?
While both provide additional coverage, Umbrella Insurance extends coverage across multiple policies and may include broader protection, while Excess Liability Insurance strictly increases the limits of a single policy without expanding coverage.
What does Umbrella Insurance NOT cover?
It does not cover:
- Business property or equipment damage
- Employee injuries (covered under Workers’ Comp)
- Contractual liability beyond what’s included in base policies
- Professional errors (covered by Professional Liability Insurance)
Is Umbrella Insurance expensive?
Compared to the protection it offers, Umbrella Insurance is cost-effective. Premiums vary based on coverage limits, business risk, and claims history, but policies often start at a few hundred dollars per year per million dollars of coverage.
Can I get Umbrella/Excess Insurance without a primary liability policy?
No. Umbrella Insurance only works on top of existing liability policies like General Liability, Auto, or Employer’s Liability. You must carry these base policies to qualify for an Umbrella or Excess policy.
How does Umbrella Insurance benefit contractors and construction businesses?
Construction projects come with high liability risks, from job site injuries to property damage claims. Many large contracts and government projects require higher coverage limits than standard policies provide. Umbrella Insurance helps meet contract requirements, protect against costly lawsuits, and safeguard your business assets if a claim exceeds your base policy limits.
Does Umbrella Insurance cover claims worldwide?
It depends on the policy. Some Umbrella Insurance policies provide worldwide coverage, while others only apply to incidents within the U.S. and its territories. If your business operates internationally, check with your insurer to ensure global protection.
How much Umbrella/Excess coverage do I need?
Coverage needs depend on industry risks, contract requirements, and the size of your business. Most businesses carry $1 million to $5 million, but high-risk industries may need $10 million or more in coverage.
