How much umbrella coverage do I need?

How to use it

This is a conversation starter for you and your broker, not a verdict. It scores exposures, then compares your answer with any limit your contracts require.

• Highest umbrella or excess limit any contract, lease or lender requires. None, or $1 million up to $10 million or more. Read the insurance article of your contracts and loan documents.
• Cars, vans and pickups, and trucks over 10,000 lbs. Your vehicle schedule has the counts.
• Public exposure. Low (few visitors, office work), moderate (customers visit, or you work in their homes or sites) or high (crowds, events, a busy store or venue).
• Alcohol. None, served at your events but not sold, or you sell, serve or make it.
• Products. None, you sell products others make, or you make, import or label products.
• Assets a judgment could reach: equity in the business, property and cash.
• Annual revenue.
• Your primary limits now: general liability each occurrence, auto liability (combined single limit) and employers liability each accident. Your declarations pages show them. Leave auto and employers liability blank if you have none.

The math

Each exposure adds points:

Total points set the tier: 0 to 1 suggests $1 million, 2 to 3 suggests $2 million, 4 to 6 suggests $5 million, and 7 or more suggests $10 million or more. The suggestion is the larger of that tier and any contract requirement. This is the tool's own rule of thumb, not an industry standard.

Hypothetical: a landscaper with 6 pickups, 2 heavy trucks, moderate public exposure, $2.5 million of assets and $6 million of revenue scores 1 + 2 + 1 + 1 + 0 = 5 points, which suggests $5 million. If a client contract required $2 million, the suggestion would still be $5 million.

Assumptions and limits

• Not a standard. No rule says a business with five points needs $5 million. Verdict sizes, your state's tort climate and your appetite for risk matter, and so does price. Ask your broker what businesses like yours buy and what each extra million costs. See nuclear verdicts and social inflation: why liability costs keep rising.
• Exposures not scored. Professional liability, cyber, abuse and pollution are outside the score, and an umbrella may exclude them or follow the exclusions of the underlying policy. Read the umbrella's own exclusions.
• Underlying minimums. The page flags general liability below $1,000,000 each occurrence, auto liability below $1,000,000 and employers liability below $500,000 each accident, because umbrella insurers typically want those underneath. Those are common requirements, not rules, so confirm with the umbrella insurer.
• General liability is always checked. A blank general liability limit reads as $0 and is flagged.
• Trucking. Interstate for-hire carriers of general freight in vehicles of 10,001 lbs or more must carry at least $750,000 under federal rules, and the page cites the rule when you list heavy trucks.
• Umbrella versus excess. The two differ in how they respond when an underlying policy is exhausted or does not cover a claim, and your contract may name one. See umbrella vs excess liability.

Use the tier as a starting quote request. Then ask for options at the next limit up. Read commercial umbrella insurance and how much liability insurance does a business need?. The What business insurance do I need? shows where an umbrella sits among your other coverages.

Where the figures come from

• 49 CFR 387.9: $750,000 minimum for for-hire interstate carriers of general freight in vehicles of 10,001 lbs or more.