Umbrella & excess liability for plumbing contractors

A serious vehicle accident or a large water-damage loss in a commercial building can exceed a $1,000,000 primary limit. An umbrella or excess liability policy sits above your general liability, commercial auto, and employer’s liability and adds limits — commonly in increments of $1,000,000.

Umbrella vs. excess

The terms are often used interchangeably. Strictly speaking, an excess policy generally follows the terms of the underlying policies, while an umbrella may provide some broader coverage in certain situations. Actual coverage depends on the specific form.

Why plumbing contractors buy it

• Contract requirements. General contractors, property managers, and institutional customers frequently require $2,000,000 to $5,000,000 or more in total limits.
• Vehicle exposure. A fleet of service vans on the road all day creates the potential for large auto claims.
• Protecting what you’ve built. As the business grows, so does what’s at stake in a large lawsuit.

Points to review

• Scheduled underlying policies. The umbrella should list your general liability, auto, and employer’s liability, with required underlying limits.
• Underlying limits. If your primary limits drop below what the umbrella requires, you may face a gap.
• Exclusions. Some umbrellas exclude certain operations or follow exclusions in the underlying policies.
• Contract wording. Some contracts require the umbrella to be primary and non-contributory or to include additional insureds.

Common questions