Insurance Terms

Umbrella Policy

A supplemental liability insurance policy that provides additional coverage above the limits of the underlying homeowner's, auto, or business liability policies. Does not cover property damage to the policyholder's own home.

What Is an Umbrella Policy

An umbrella policy is a supplemental insurance policy that provides an additional layer of liability coverage above the limits of the insured's existing homeowner's, auto, or commercial liability policies, and it does not cover damage to the policyholder's own property. Umbrella policies are commonly confused with property coverage, but they serve an entirely different purpose. They protect against liability to others, not damage to your own assets.

Umbrella Policies and Homeowners

A homeowner's umbrella policy does not pay for roof damage. It provides additional liability coverage if someone is injured on the property or if the homeowner is sued for damages exceeding their base policy limits. Contractors sometimes encounter homeowners who believe their umbrella policy supplements their property coverage. It does not. The roof claim is handled entirely under Coverage A (dwelling) and related coverages on the homeowner's policy.

Umbrella Policies for Contractors

For roofing and restoration contractors, a commercial umbrella policy is essential business insurance. It extends coverage above the limits of the general liability, commercial auto, and employer's liability policies. Roofing is inherently high-risk work. A fall from a roof, a vehicle accident en route to a job site, or property damage from a dropped tool can generate liability claims that exceed the underlying policy limits. The umbrella policy covers the excess, providing protection against catastrophic financial exposure.

Frequently asked questions

No. An umbrella policy provides additional liability coverage, not property coverage. It protects against lawsuits and liability claims that exceed your underlying policy limits. It does not pay for damage to the policyholder's own property. Roof damage claims are covered under the dwelling coverage (Coverage A) of the homeowner's policy.

Yes. A commercial umbrella policy provides additional liability protection above the contractor's general liability and auto liability limits. If a worker falls off a roof and the injury costs exceed the GL policy limits, the umbrella policy covers the excess. For contractors, an umbrella policy is a critical layer of protection against catastrophic liability claims.