Short answer
An umbrella limit over general liability requirement usually asks for the stated umbrella limit to sit on top of your underlying policies. The underlying general liability limit typically doesn’t count toward it. Some contracts do allow combining limits, so the exact wording decides, and your agent can confirm how your policies fit.
What does an umbrella limit over general liability requirement usually mean?
Say a contract requires a $5 million umbrella. You already carry $2 million of general liability, so you buy a $3 million umbrella because two plus three makes five. The client then rejects it, and payment for your work waits.
Most owners who write this requirement mean an umbrella or excess policy with a $5 million limit, sitting over your general liability, auto and employer’s liability. Under that reading, $2 million of general liability plus a $5 million umbrella gives you up to $7 million for a covered liability claim. Policy terms and exclusions determine what actually applies.
When can you combine primary and umbrella limits?
Some contracts say limits may be satisfied by any combination of primary and umbrella or excess policies. With that sentence in place, $1 million of auto plus a $1 million umbrella may meet a $2 million auto requirement. Many standard owner-architect agreements are written this way, and the AIA’s B503-2017 guide includes model language allowing it.
Compare the exact wording against two common phrasings:
- “Umbrella or excess limit of” a stated amount. This usually points to the umbrella limit itself.
- “Total limits of” or “may be satisfied by a combination.” This usually means you can add the policies together.
Our article on whether an umbrella policy can satisfy a $2 million auto liability requirement walks through the combining question for auto.
Example: a hypothetical $5 million requirement
A design firm carries $2 million of general liability. Its client’s contract asks for a $5 million umbrella, and the firm buys a $3 million umbrella to reach a $5 million total. The client’s reviewer reads the requirement as $5 million over the underlying coverage and holds payment until the firm resolves it.
In this hypothetical, the firm sends the exact insurance section to its agent and asks the client in writing how it reads the wording. Whether a higher limit is available, and at what cost, depends on policy terms, exclusions and underwriting.
What should you do before buying an umbrella?
- Send the exact insurance section to your agent rather than a summary.
- Ask the client how they read it if the wording is unclear, and get the answer in writing.
- Confirm the umbrella follows form over the policies the contract names.
- Price both options before you sign, since a higher limit may cost more than the fee you’ll earn.
Our certificates page explains how certificate requests work once the coverage is in place.
What to check
- Does the contract say “umbrella or excess limit of” or “total limits of”?
- Does it allow a combination of primary and umbrella or excess policies?
- Which underlying policies must the umbrella sit over?
- Does the umbrella follow form over those policies?
- Does the extra limit cost more than the project is worth?
Related questions
Does my umbrella cover professional liability?
Usually not. Most umbrellas sit over general liability, auto and employer’s liability. Professional liability is generally written on a separate policy, so check your policy wording.
Can I ask the client to accept a smaller umbrella?
You can ask. Some clients may agree, especially on smaller scopes. Get any change in writing.