Ep. 591 Protecting Your Bottom Line: The Critical Role of Excess/Umbrella Liability Coverage for Contractors

Rancho Mesa’s Alyssa Burley sits down with Jeremy Hoolihan, Partner with the Janitorial Group, and talk about the critical role of excess and umbrella coverage for contractors.

Show Notes: ⁠⁠Subscribe to Rancho Mesa's Newsletter⁠⁠.

Host: ⁠⁠⁠⁠Alyssa Burley⁠⁠

Guest: ⁠⁠Jeremy Hoolihan⁠⁠

Editor: Megan Lockhart

Music: "Home" by JHS Pedals, “Breaking News Intro” by nem0production

© Copyright 2026. Rancho Mesa Insurance Services, Inc. All rights reserved.

Transcript

Alyssa Burley: You’re listening to Rancho Mesa’s StudioOne™ podcast, where each week we break down complex insurance and safety topics to help your business thrive.

I’m your host, Alyssa Burley, and I’m joined by Jeremy Hoolihan, Partner with Rancho Mesa. Today, we’re going to talk about the critical role of excess and umbrella coverage for contractors.

Jeremy, welcome to the show.

Jeremy Hoolihan: Hi Alyssa, it’s great to be here at StudioOne.

AB: Well we’re happy you’re here.

Now, you recently wrote an article that highlights the fact that primary insurance policies often aren’t enough for contractors. Will you explain why excess and umbrella liability coverage has become such a critical safeguard in today’s construction environment?

JH: Sure, absolutely. So, just to take a step back, umbrella or excess policies are typically in place to provide additional limits over a contractor's general liability policy, their auto policy, as well as their employer's liability, which is a portion of the workers' comp policy. And as you know, in California, we're a highly litigious state. So couple that with just the construction industry itself, it's a high-risk environment, heavy machinery, hazardous job sites, and really a constant exposure to the public oftentimes. And so by adding that additional coverage over those underlying policies it really kind of adds a financial safety net per se, so that if something major happens it doesn't jeopardize the company.

AB: So it's not just your every day we have a claim this is when something catastrophic happens?

JH: Yes, yeah definitely in place for catastrophic situations. You know, we're talking multi-million dollar type claims.

AB:  Okay. So you also mentioned that a single major claim can disrupt cash flow, bonding capacity, and overall financial stability. How does excess or umbrella coverage help protect a contractor’s ability to keep projects moving and maintaining long‑term stability?

JH: Well, as you said, Alyssa, these large claims can disrupt a company's financial stability, reduce their working capital, and delay even active jobs. So an excess or an umbrella policy helps protect those critical elements and ensures that a company can stay afloat while they're involved in a large claim. As I mentioned to you before, your standard GL and auto policies, typically they have a million dollar limit. So at the very least, by purchasing an umbrella, you're at least going to double those occurrence limits. So from a financial standpoint, it's basically helping insulate contractors from large losses.

AB: So we're seeing construction contracts increasingly require higher liability limits. How do excess and umbrella policies help contractors stay competitive, meet contract requirements, and continue bidding on larger projects?

JH: Well, it's very typical for project owners, municipalities, and general contractors to require higher limits of liability in order to qualify for the project. So, we're oftentimes seeing contract required limits of $5 million, $10 million, or even more just depending on who you're doing the work for. So what an umbrella or an excess policy does is it lets you get even an opportunity to bid the project because you're going to have those higher limits requirements. So it allows you to bid confidently on larger and oftentimes more profitable projects. Umbrellas are a cost-effective way of increasing your limits rather than increasing each specific coverage. And umbrellas are designed to respond to major claims so that it creates a high-level value relative to the cost of the policy itself. 

AB: Okay. So it makes sense to have the umbrella versus getting individual higher policies.

JH: Yeah, it wouldn’t make sense to increase limits on each of those specific policies when you can get an umbrella policy that will essentially create the same effect at a much lower price.

AB: Okay. So Jeremy, if listeners have questions about excess and umbrella coverage, what’s the best way to get in touch with you?

JH: Sure, my office direct line is (619) 937-0174 or you can always email me at jhoolihan@ranchomesa.com

AB: All right, well Jeremy, thanks for joining me in StudioOne™.

JH: It was great to be here thanks for having me.

AB: Thanks for tuning in to our latest episode produced by StudioOne™. If you enjoyed what you heard, please share this episode and subscribe. For more insights like this, visit us at RanchoMesa.com and subscribe to our weekly newsletter.