Why Contractors Should Consider Excess Liability Insurance

In construction, risk comes with the job. From scaffolding accidents to lawsuits over property damage, even the most cautious contractors can find themselves facing serious claims. The question is will your current insurance limits be enough when the unexpected happens?

​If you’re a general contractor, subcontractor, or specialty tradesman, it’s time to take a closer look at Excess Liability Insurance, an essential layer of protection that could save your business.
 
What Is Excess Liability Insurance?
Excess liability insurance, often referred to as umbrella coverage for businesses, is a policy that provides additional coverage beyond the limits of your primary general liability, commercial auto, or employers' liability policies.Think of it like this:
If your general liability policy covers $1 million and you’re sued for $2 million, excess liability kicks in to cover the remaining amount (up to your excess policy limit).
 
Why Contractors Need It More Than Ever
1. Construction Claims Are Increasing
Lawsuits are on the rise, and so are settlement amounts. A single job site incident involving injury or significant property damage can result in claims that exceed standard policy limits.
 Real Example: A subcontractor’s employee is seriously injured due to faulty scaffolding. Medical bills and legal judgments surpass $1.5 million. Without excess liability, the contractor would be responsible for the difference out of pocket.
 
2. Your Clients May Require It
More and more project owners, municipalities, and general contractors require subcontractors to carry excess liability before awarding work. It’s seen as a sign of financial responsibility and professionalism.
Our Tip: Carrying excess liability insurance can give you a competitive edge when bidding for larger or more complex jobs.
 
3. It Covers the Big Mistakes (and the Expensive Ones)
Standard liability policies have limits. If a lawsuit or settlement pushes beyond those limits, your company’s assets and your future are on the line.
Excess liability ensures your business can survive a major claim. It’s not just protection for today, it’s peace of mind for tomorrow.
 
4. It’s Cost-Effective Protection
Excess liability insurance is relatively affordable compared to the high-dollar protection it provides. A few extra dollars a month could save you hundreds of thousands in a serious claim.
Value Check: For many small-to-mid-sized contractors, a $1–$5 million excess policy costs less than you’d spend on replacing a stolen tool trailer.
 
5. It Covers Multiple Policies
Excess liability doesn’t just sit above your general liability; it can extend over your commercial auto and employers' liability as well. That means if you cause a major accident with your work truck or face a serious injury claim from an employee, you’ve got a backup plan.
 
Key Industries That Should Strongly Consider Excess Liability:

• General Contractors
• Concrete and Masonry
• Roofing and Siding
• Electrical and Plumbing
• HVAC and Mechanical
• Earthmoving and Grading
• Commercial Builders and Remodelers

If your business is on that list or if you regularly take on projects with subcontractors or complex risk excess liability isn’t optional. It’s essential. 
 
Let’s Talk About the Right Limit for You
At [Your Agency Name], we specialize in helping contractors understand, customize, and secure the right insurance protection. We’ll help you determine:

• How much excess liability you may need
• Which underlying policies it should support
• How to present it in your bids and contracts
• And how to keep the cost within budget

 
Protect Your Work. Protect Your Livelihood.
One large claim shouldn’t be the reason you lose your business. Excess liability insurance helps make sure it isn’t.
We help contractors build with confidence one policy at a time.