Umbrella insurance provides an additional layer of liability coverage above your underlying general liability, commercial auto, and employers liability policies. When a claim exceeds the limits of your primary policy, the umbrella policy kicks in to cover the excess amount. For roofing contractors working on commercial projects, umbrella coverage is almost always required by general contractors and property owners.
A typical roofing contractor carries $1 million in general liability and then adds an umbrella policy of $2 million to $10 million depending on the size and type of projects they pursue. Large commercial projects, government contracts, and any work involving occupied buildings commonly require $5 million or more in total limits. The umbrella policy sits on top of your scheduled underlying policies and provides a single additional limit that applies across all of them.
Umbrella insurance is relatively cost-effective compared to increasing your primary policy limits. A $2 million umbrella might cost $3,000 to $5,000 annually for a mid-size roofing contractor, while increasing your primary CGL from $1 million to $3 million would cost significantly more. The umbrella also provides broader coverage in some cases, potentially covering claims that fall outside the scope of your primary policies. When a GC asks for higher limits on your COI, an umbrella is usually the most efficient way to meet that requirement.