Umbrella liability is a policy that adds liability limits above your primary policies. The Insurance Bureau of Canada describes it as "a special form of liability policy designed to protect the insured for certain unknown contingencies over and above normal coverages." IRMI explains that it sits over primary auto and general liability policies and provides extra limits.
Why It Matters for Snow Contractors
Some commercial and public sector contracts ask for higher limits than a contractor carries on its primary general liability policy. Published snow tenders we found asked for anywhere from $2 million to $5 million in general liability. Contractors often combine a primary policy with an umbrella to reach a higher total, although whether that satisfies a contract depends on the contract wording.
An umbrella can also sit over auto liability, which matters when one contract asks for high limits on both.
Example
Your general liability policy has a $2 million per occurrence limit. A new contract requires $5 million. With a $3 million umbrella over your general liability, a large covered claim would first use the primary policy's limit, and the umbrella would respond above it, subject to its terms.
Related Terms and Guides
General information only, not insurance or legal advice. Policy wordings differ; a licensed broker can explain how your own policy and contracts treat this.
Further reading: Insurance Bureau of Canada: Types of business insurance coverage; Insurance Bureau of Canada: Insurance glossary
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Frequently Asked Questions
Is an umbrella the same as excess liability?
They are related, but the terms can differ in how coverage follows the underlying policies. A broker can explain the difference.
Does an umbrella cover everything my primary policy excludes?
Not necessarily. Umbrella policies have their own terms and exclusions.