Umbrella insurance for New Jersey contractors

Commercial contracts in NJ typically require $3M-$5M combined liability; larger commercial and multi-family projects demand $10M+. Residential remodelers often operate on $2M combined. The right limit is whatever satisfies your biggest contract requirement plus a margin for severity of potential claims.

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's the cheapest way to buy meaningful 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.