Extra Protection Beyond Primary Policies
Umbrella Liability Insurance for Contractors in Arizona
When a claim exceeds your general liability, commercial auto, or workers’ comp employer liability limits, umbrella insurance steps in. For Arizona contractors working jobs that involve property damage, injury risks, or high-dollar projects, a single incident can lead to a claim well over $1 million. Contractors umbrella insurance offers added peace of mind and coverage for these large, unexpected liabilities.
Why Contractors Benefit from Umbrella Coverage
In construction, even well-run jobs can result in big claims. Multiple injuries from a site incident, a serious auto accident involving a company truck, or a subcontractor dispute that turns litigious—these situations happen. An umbrella policy adds multi-million-dollar protection at a cost that’s far less than raising each individual policy’s limits. Clients and contracts often require higher coverage amounts, especially on commercial or government jobs. Umbrella insurance makes meeting those limits easier and more affordable.
What Umbrella/Excess Insurance Covers
A commercial Umbrella or Excess policy gives your business additional coverage above the limits of your underlying policies. For example, if your GL policy pays out its $1 million max on a claim, and the final settlement is $1.6 million, your umbrella or excess can cover the remaining $600,000. These policies can apply to a range of liability coverages, including:
- General Liability
- Commercial Auto Liability
- Employer’s Liability (part of Workers’ Comp)
Commercial jobs often require Umbrella or Excess policies, which significantly extend the limits of the policies you already carry.
Umbrella vs. Excess Liability – What’s the Difference?
You may hear “excess liability” used interchangeably with umbrella. Here’s the key difference: excess liability strictly follows the underlying policies and doesn’t expand coverage. An umbrella can span multiple policies and may include some extra coverage features. That said, for most small to midsize contractors in Arizona, the important takeaway is this: both provide critical backup when a claim maxes out your main coverage.
Typical Coverage Amounts & Underlying Requirements
Umbrella policies are sold in $1 million increments. Many small contractors carry a $1–2 million umbrella, while larger firms may carry $5 million or more. To qualify, your underlying policies (GL, Auto, WC) must meet minimum required limits—typically $1 million per occurrence. JP Insurance Group makes sure your foundation is solid before we layer on the umbrella.
How Much Does Umbrella Insurance Cost in Arizona?
Umbrella coverage is cost-effective. For Arizona contractors, a $1 million umbrella policy might start around a few hundred dollars annually, with rates depending on your payroll, trade, and claim history. When you consider the size of potential claims, it’s one of the best-value protections you can buy.
It Only Takes One Big Claim
Imagine a site accident leads to multiple injuries, with legal costs and settlements totaling over $2 million. If your primary GL policy tops out at $1 million, you're left exposed. With a $2 million umbrella in place, that gap would be covered. That's the kind of protection that keeps contractors in business after a worst-case scenario.
Frequently Asked Questions – Umbrella Liability Insurance
What does an umbrella liability policy cover for contractors?
An umbrella policy provides extra liability coverage that kicks in when the limits of your primary policies—like General Liability, Commercial Auto, or Employer’s Liability—are exhausted. It helps cover large claims that would otherwise exceed your standard policy limits.
How is an umbrella policy different from excess liability insurance?
While both extend your coverage limits, umbrella policies may apply to multiple underlying policies and can sometimes cover a few additional risks not included in your base policies.
When should a contractor consider getting umbrella coverage?
If you work on larger projects, operate heavy equipment, or interact with the public, umbrella coverage helps protect your business from lawsuits or claims that could exceed your primary limits.
Does umbrella insurance cover everything beyond my other policies?
No. It only extends limits on liability policies you already have in place.
How much does umbrella insurance cost for contractors?
It’s typically very affordable compared to the coverage it adds. For small to midsize contractors, a $1 million umbrella policy might cost between $500–$1,500/year, depending on your risk profile, revenue, and underlying policy limits.
Do I need specific minimum limits on my base policies to qualify?
Yes. Insurers usually require your General Liability, Auto Liability, and Employer’s Liability policies to carry specific minimum limits (often $1 million each) before issuing an umbrella. We’ll make sure your policies meet those requirements.
Let’s Talk About the Right Protection
Think your current limits might not cut it on a big claim? Let’s raise your shield. We’ll walk through your risks, underlying coverages, and recommend the right level of excess protection. Whether you're in Mesa, Peoria, Surprise, or across the Valley, JP Insurance Group can help you build a stronger liability wall.
Contact Us to request a quote or discuss how umbrella liability insurance fits into your contractor coverage plan.