The cover that only matters once, and matters completely.
Your liability limit is a ceiling. Anything above it is paid by the business, and then by the owners. Extra layers cost far less than the first million, because the top of a tower is rarely reached, which is why the price does not rise in step with the limit.
Build your file How it works Ask what higher limits costExtra liability limit above the policies you already hold
Anyone working at height, with vehicles, or with the public on site
Your current limits and any contract asking for more
What is umbrella or excess liability insurance?
It sits on top of the liability policies you already hold and pays when a claim exhausts them. Excess liability follows the terms of the policy underneath it. An umbrella can be slightly broader, sometimes covering things the underlying policy does not, subject to its own deductible. Either way, the point is the same: it raises the ceiling on the claim that would otherwise reach your balance sheet.
A claim that exhausts your liability limit does not stop there. The remainder is a debt of the business, and for an owner that can mean the assets behind it. The Insurance Bureau of Canada calls an umbrella “A special form of liability policy designed to protect the insured for certain unknown contingencies over and above the normal coverages”. Over and above is the point. It replaces nothing. Read the IBC insurance glossary (opens in a new tab).
A tower, not a replacement.
The underlying policies
Your general liability, commercial auto and sometimes employer’s liability. These pay first, up to their limits.
The excess layer
Picks up where they stop, to a much higher total. Commonly bought in millions at a time.
Why the price per million falls
Claims that large are rare, so the price per million falls sharply as you go up the tower.
Contract requirements
Larger construction, public-sector and enterprise contracts frequently demand $5 million, $10 million or more in total.
What it does not do
It cannot fix a gap in the underlying policy. If the base policy excludes something, the excess layer usually excludes it too.
Keeping the tower valid
If an underlying policy lapses or is reduced, the excess layer may not respond as expected. Renewals must stay aligned.
Who genuinely needs a higher limit.
Not everyone does. These are the situations where a base limit gets tested.
You work at height or with heavy equipment
Construction, roofing, crane work, excavation. A single serious injury claim can pass $2 million quickly.
The public comes to you
Restaurants, venues, events, recreation. Volume of people means volume of exposure.
Vehicles are central to the business
A serious at-fault accident involving a commercial vehicle is one route to a very large claim.
How this can play out.
A serious at-fault accident involving a company truck settles above your two million limit. The excess layer pays the difference. Without it, the remainder is a debt of the business.
Ask us the price before you decide you cannot afford it.
What an extra layer actually costs
The assumption is that doubling the limit doubles the premium. It does not. Because the upper layers are far less likely to be reached, an additional several million in cover often costs a fraction of the base policy.
So the honest advice is simple: ask for the number. If it is small relative to what it protects, and it usually is, take it. If your exposure genuinely does not justify it, we will tell you that instead.
What umbrella cover assumes about the layers below.
An umbrella policy sits on top of your other policies and follows their shape. Its conditions are mostly about keeping the layers below exactly as described.
An underlying policy that lapsed
The umbrella assumes the primary limits exist. Let one lapse or shrink and the umbrella can act as if the missing layer had paid. That gap is yours.
Schedules that drifted apart
The umbrella lists the policies beneath it. Swap an insurer, change a limit or add a vehicle without updating the schedule and the tower has a floor missing.
Cover the primary never had
An umbrella generally follows the shape of what is underneath. A risk excluded below is not rescued above. Height does not add breadth.
Notice given to the wrong layer
Big claims need every layer notified early. Telling the primary and forgetting the umbrella invites the one insurer with the largest cheque to ask why it heard last.
The tower is one machine. Check every renewal that the schedules, limits and insurers underneath still match what the umbrella believes.
What business owners ask us.
What is the difference between umbrella and excess liability?
Excess liability follows the terms of the policy beneath it and simply extends the limit. An umbrella can be broader in places, sometimes covering exposures the underlying policy does not, subject to its own deductible.
How much total liability should my business carry?
At minimum what your contracts require. Beyond that it is about exposure: how badly someone could be hurt by what you do, and how much of your balance sheet is at risk above the limit.
Does an umbrella fix gaps in my main policy?
Generally no. If the underlying policy excludes something, the layer above usually excludes it too. Fix the base cover first, then raise the limit.
Is it much more expensive to go from $2 million to $5 million?
Usually far less than the first layer, because the additional layers are unlikely to be reached. It is worth asking for the actual figure before ruling it out.
My contract asks for $10 million. Can that be arranged?
Yes, commonly through an excess layer on top of your existing policies. Send us the insurance clause and we will build the tower to match it exactly.
Does it cover professional liability too?
Not usually. Professional liability is a separate line, and an excess layer over it has to be arranged deliberately.
The questions behind the questions.
Ask for the number.
Tell us your current limits and what your contracts demand. We will price the layers above.