Commercial Umbrella Insurance For Contractors Explained And What 1M vs 5M Costs

How's it going? Thanks for tuning in. If you are watching this, you are most likely a contractor and you maybe are looking into umbrella insurance for your business. Maybe you have a contract requirement coming up. I'm making this video because this question did come up recently around the purpose of umbrella insurance for contractors, businesses in general, but contractors specifically, because this requirement does come up a lot when you are working with general contractors, maybe property owners or developers on a project, and maybe you are a business that you've been doing well and you're looking to get bigger contracts. And in order to get those bigger contracts, it is very common to see an umbrella requirement, whether that's a million dollars or if you're working with larger general contractors or developers that have larger projects that they've already done, sometimes that umbrella requirement can be five million dollars. Here in Michigan, if you're doing any work for General Motors, any of the big three, or any major suppliers, if you're doing any work for them, a lot of times they'll have at least five million dollar requirements or higher. So the purpose of umbrella insurance, it provides additional liability coverage over three main policies. Your general liability, your workers' compensation, and then your commercial auto insurance. So if you ever have a claim situation that goes above and beyond those primary policy limits, that's where an umbrella policy would step in to provide additional coverage. When you are working on these larger projects, there's more exposure. There's a higher, not probability for loss, but there's a higher exposure so that a loss could be bigger. And that is why these larger organizations will require you to carry an umbrella in order to do work for them. Because for the most part, it will reduce their exposure and their liability. So just remember for the basics around umbrella insurance, it's going to sit over those three main policies. The pricing for umbrella insurance can vary, but for the most part, it's going to be at least, if you're looking at a million dollars in coverage, which is usually the starting point depending on your needs, it's going to depend on the vehicles that you have. It's going to depend on your exposure for your workers' comp and your liability for your general liability, how big your payroll is, how many employees you have, all of those are going to factor in. But as far as pricing goes, it's going to start at least $1,500 to $2,000 typically for that standard $1 million limit. When you get into the $5 million limits, I have very rarely seen anything less than $4,000 recently. Again, and this is if you maybe just have one vehicle or maybe a couple of vehicles, a few employees, you're not really going to see a $5 million umbrella for less than $4,000. You're not going to see a million dollar umbrella for less than $1,500 to $2,000 at the very minimum. Sometimes you might, you might get lucky out there, but I would say those are the minimum premiums that you're seeing for those coverage limits. If you have specific questions about umbrella liability for your contracting business, or if you just have questions in general about your insurance as a contractor, whether you are doing commercial projects and you're a subcontractor for a larger general contractor, or if you are a general contractor yourself and maybe you're doing work for a developer and they're requiring that you have certain limits, it's definitely worth looking at your entire program as a whole. Again, if it is something you are looking for help with, feel free to reach out. I would love the opportunity to work with you on all your commercial insurance needs, but again, specifically if you are looking at an umbrella, would love to see if our team could help.