Explainer
Umbrella vs excess liability: what to check on a sub’s certificate
Both umbrella and excess liability sit on top of the sub’s regular policies and add more limit when a big claim eats through the first layer. An umbrella can sometimes be broader than the policies under it. An excess policy generally follows their terms. On a certificate, look for which one it is and which policies it sits over.
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Free COI auditWhat they do
Say the sub’s general liability pays up to a set limit. A serious claim goes above that. An umbrella or excess policy pays the next layer, so you aren’t left with the rest.
The difference
| Umbrella | Excess | |
|---|---|---|
| Sits over | Several policies, like general liability, auto and employer’s liability | Usually the same, but may be tied to one |
| Terms | May cover some things the lower policies don’t | Generally follows the lower policy’s terms |
| Where to look | The “umbrella liab” and “excess liab” lines on the certificate | Same line, different box checked |
The wording of the actual policy decides how each one behaves. Ask your broker.
What to check on the certificate
- Is an umbrella or excess line filled in at all?
- Does the end date cover the job?
- Which policies does it sit over? Many contracts want it over general liability, auto and employer’s liability.
- Is the limit what your contract asks?
Not legal or insurance advice. This is general information. Your contract, your state and your policy decide what applies to you. Ask your broker or attorney.
How they stack
Picture the general liability policy as the first floor, with a limit. If a claim is bigger than that, an umbrella or excess policy sits above it and pays more, up to its own limit. Umbrella policies may also cover things beyond the first policy. Excess usually just stretches the same coverage. Ask the agent which one the sub has and what it sits on top of.
What to check on the certificate
- Does the umbrella list the underlying policies it sits on?
- Do the dates cover your job?
- Are you listed as an additional insured on the umbrella too, if your contract asks?
Frequently asked questions
Do I need an umbrella from my subcontractors?
It depends on your contract and the size and risk of the job. Many larger jobs and higher-risk trades ask for it.
Is an umbrella the same as excess liability?
They’re close cousins. Both add limit on top. An umbrella can be broader than the policies below it, while an excess policy generally follows their terms.
Do my subs need an umbrella policy?
It depends on the project and your contract. Larger or riskier jobs often ask for it. Your broker can help set a level.
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