An Umbrella policy doesn’t cover anything on its own — it extends the limits of the policies underneath it once those limits are exhausted. For a growing contractor, it’s often the cheapest large chunk of protection available, and increasingly a requirement rather than an option.
How It Actually Works
If a claim exceeds the limit of your underlying General Liability, Auto, or Employer’s Liability policy, an Umbrella policy picks up where that policy leaves off, up to its own separate limit. It sits “above” your other coverages rather than replacing any of them.
Why GCs and Public Contracts Increasingly Require It
As project size grows, so does the potential size of a claim — a standard $1M General Liability limit that was adequate for smaller jobs can look thin once you’re bidding larger commercial or public work. Many GC contracts now specify a combined limit (primary plus umbrella) well above what a standalone GL policy provides.
Why It’s Relatively Inexpensive
Because an Umbrella policy only pays out after the underlying policy’s limit is exhausted — a comparatively rare event — insurers can price the additional coverage well below what the equivalent limit would cost as primary coverage. For many contractors, it’s a meaningful jump in protection for a modest premium increase.
Signs You Should Look Into One
You’re bidding on larger commercial or public contracts than you were a few years ago.
A GC contract specifies combined liability limits above your current GL policy.
Your fleet, crew size, or overall revenue has grown meaningfully since your coverage was last reviewed.
Not sure if your current limits are keeping pace with your growth? Request a Quote and we’ll take a look.