Umbrella and excess insurance.

The difference between umbrella and excess is what happens when a claim falls outside the policies underneath. An excess policy follows the underlying policies exactly, so it only pays where they pay, just higher. An umbrella can be broader, responding to some claims the underlying policies do not cover, after you pay a self-insured retention. Two quotes at the same limit and the same price can be one of each, and the name on the quote does not tell you which. A scaffold collapse claim is paid the same way by both. What changes the answer is the form language itself, so we read it before you bind.

How much umbrella a general contractor asks for depends on the size of the project and the owner behind it. A small commercial buildout usually asks for a total a step or two above a standard general liability limit. A hospital, a school, or public work asks for several times that. The ask arrives in the bid package as a total each occurrence, and the umbrella is sized to fill the space between your GL limit and that total. What changes the answer is the largest contract you plan to sign this year, so we size the layer to that one and let the smaller jobs ride along.

The umbrella generally does not cover your professional liability. Umbrellas sit over general liability, auto, and employer’s liability, and most exclude claims that arise from design, advice, or professional services. A design build contractor sued over a drawing error finds the umbrella silent, because the GL policy under it was silent too. Professional liability is its own policy with its own limit and defense. What changes the answer is whether a carrier will schedule a professional policy underneath the umbrella, which some will for certain trades, so we ask before assuming the layer reaches that far.

What has to sit underneath an umbrella is written into the policy as the underlying requirements, a list of policies and minimum limits you agree to keep in force. Almost always that means general liability, commercial auto, and employer’s liability at specific limits. If one of them lapses or renews at a lower limit, the umbrella treats the missing amount as yours to pay before it responds. A GL policy that quietly renews at half the required limit leaves a hole in the layer. What changes the answer is the schedule on your umbrella, which is why we keep the underlying policies in line as each one renews.

The umbrella raises your auto limits too, as long as commercial auto is scheduled underneath it. Auto is usually the reason carriers care most about the layer, because a serious crash with a company van is the most common source of a very large liability claim. With auto scheduled, a claim that runs past the auto liability limit continues into the umbrella. Without it, the umbrella stops at the vehicle door. What changes the answer is whether your auto policy is on the umbrella’s schedule at the required limit, and whether every vehicle and driver is on the auto policy in the first place.

You can buy an umbrella without changing your GL policy, and that is how most of them are bought. The umbrella is a separate policy, often from a different carrier, that sits on top of the GL policy you already have. A general contractor asks for a higher total, the umbrella closes the gap, and the GL renews as it always has. The one thing the umbrella carrier will check is that the GL limit meets its underlying requirement. What changes the answer is that limit, because a GL policy written below the umbrella’s minimum has to be raised first, and we handle that with the GL carrier before binding.