Umbrella insurance for California contractors

Not legally required, but the litigation climate makes it practically necessary. A single serious-injury or defect claim can blow through $1M of GL quickly. Commercial projects routinely demand $5M+ combined liability, which only umbrella delivers cost-effectively.

$5M is the practical floor for most commercial work. Larger commercial, multi-family, and prevailing-wage public work often require $10M+. Right-size to your biggest contract requirement plus a margin.

Umbrella insurance (often called excess liability) sits above your general liability, commercial auto, and employer liability policies, adding additional limits on top. When a claim exceeds your underlying policy's limit, the umbrella picks up the next layer. It is a cost-effective way to add liability capacity.

Not legally required, but commercial contracts routinely demand $5M+ in combined liability limits, which you almost never have from a standalone GL. Umbrella is the practical way to meet those contract requirements and the sensible way to protect the business from catastrophic-severity claims.

For a small-to-mid-size contractor with a clean history, a $5M umbrella typically runs $1,500 - $3,000 per year. Per $1M of limit, expect $800 - $4,500 depending on trade class, fleet size, revenue, and claims history. Going from $1M to $5M usually costs less than you'd expect, most claims never reach the higher layers, so the rate per million drops.

True umbrella is broader than the underlying, it can drop down for claims the underlying doesn't cover (subject to a self-insured retention). Excess-follow-form simply extends the underlying's coverage and doesn't drop down. For most contractors, follow-form is fine and cheaper; true umbrella is worth the extra cost if you have unusual exposures.

Minimum underlying for most umbrella markets: $1M GL per occurrence / $2M aggregate, $1M commercial auto combined single limit, and $500K/$500K/$500K employer liability on WC. Some markets require higher underlying for larger operations. We match the excess form to the underlying at bind.

No, contractor umbrella specifically excludes professional liability. Design-build firms, engineering contractors, and contractors who provide design services need a separate professional liability (E&O) tower.

No. Wrongful termination, discrimination, harassment, and other EPL claims are excluded. EPL liability is a separate policy with its own limit tower.

If you have no owned vehicles and no hired/non-owned auto exposure, yes, some markets will write umbrella over just GL. Most contractors have some auto exposure, so the policy typically sits over both GL and auto.

On a true umbrella (not follow-form), the SIR is what you pay out of pocket for a claim that hits the umbrella's drop-down coverage (claims not covered by underlying). SIRs are typically $10K-$25K on small contractor umbrellas. Follow-form umbrellas have no SIR, they follow the underlying's deductible.

Most commercial contracts require the GC (and owner) as additional insured on both your GL AND your umbrella. Standard practice, we add the endorsements at bind at no extra cost when the contract requires it.