As a contractor, you work in an industry where accidents and lawsuits aren’t just possibilities, they’re expected risks. From vehicle crashes to jobsite injuries or post-completion property damage, one large claim can max out your insurance limits and threaten your company’s future.
This is where commercial umbrella insurance plays a vital role.
What Is Commercial Umbrella Insurance?
It’s a policy that provides additional liability coverage when your other policies (like general liability or commercial auto) reach their coverage limit. Think of it as a financial safety net when a single event leads to high damages or legal fees.
Why Construction Companies Need It
In construction, even routine projects can turn into major liabilities:
- A subcontractor causes damage at a client’s property and the claim exceeds your general liability limit.
- One of your trucks is involved in a serious highway accident, resulting in injuries and a $1.5 million lawsuit but your auto liability limit is $1 million.
- A holiday party held at a rented venue results in property damage and legal action.
Without an umbrella policy, your business would be forced to pay the difference out-of-pocket, possibly putting your operations at risk.
What Does It Cover?
- Excess liability for general liability, auto, and employer’s liability
- Legal defense costs
- Claims not covered under base policies, subject to self-insured retention (like a deductible)
- Protection for additional insureds, including officers, directors, and employees when acting on behalf of the business
Umbrella insurance can also extend to specialized exposures like XCU (explosion, collapse, underground) liability, which is common in excavation or structural work.
Umbrella insurance isn’t just for large corporations. For mid-sized contractors, it’s a smart and affordable way to safeguard your business when large claims arise.
Talk to McHugh Insurance Group to explore how umbrella coverage fits into your construction insurance program.