Umbrella Liability Insurance for Home Care Agencies
Extra liability protection that goes above and beyond your primary insurance policies. Provides an additional layer of coverage when claims exceed your general liability, auto, or employer’s liability limits.
- Provides extra coverage above your primary liability policies
- Protects against catastrophic claims that exceed standard limits
- Typically offers $1M-$5M in additional liability protection
What Is Umbrella Liability Insurance for Home Care?
Umbrella liability insurance for home care is an essential layer of protection that goes above and beyond your primary policies. Often called excess liability for home health, this coverage acts as a safety net when claims exceed the limits of your general liability, commercial auto, or employer’s liability insurance. Having specialized home care umbrella coverage ensures your agency is protected from catastrophic financial losses that could otherwise bankrupt your business.
For home care agencies, umbrella insurance is critical because catastrophic claims can and do happen. A serious client injury, multi-vehicle accident, or major liability claim can easily exceed $1 million. If your general liability limit is $1 million and you face a $3 million claim, you’re personally responsible for the $2 million gap—which could bankrupt your agency and put your personal assets at risk. Umbrella insurance fills this gap and protects your business from financial devastation.
While umbrella insurance isn’t legally required, many managed care contracts, hospital partnerships, and large client contracts require home care agencies to carry umbrella coverage—often $2 million or more. Additionally, agencies with significant revenue (over $1 million annually), substantial business assets, or that transport clients should seriously consider umbrella coverage. As your business grows, so does your liability exposure and the need for higher coverage limits.
For more on managing business risk, review the Insurance Information Institute (III) guide to umbrella policies
Comprehensive Umbrella and Excess Liability Protection
Umbrella liability insurance provides additional coverage across multiple liability exposures, protecting your business from catastrophic claims.
Provides additional coverage above your general liability policy limits for bodily injury and property damage claims. When a serious injury or property damage claim exceeds your primary general liability limit, your umbrella policy responds with additional coverage.
Common Scenarios:
Examples include: Client fall results in $2.5M claim but GL limit is only $1M (umbrella covers extra $1.5M), multiple injured parties in single incident exceed aggregate limit, catastrophic injury to client resulting in permanent disability, property damage claim exceeding GL limits, large lawsuit with multiple plaintiffs, or settlement exceeds primary policy limits.
What’s Covered:
- Coverage above GL policy limits
- Bodily injury claims exceeding primary coverage
- Property damage exceeding primary limits
- Personal and advertising injury excess coverage
- Legal defense costs above primary limits
- Settlements and judgments up to umbrella limit
- Typically $1M-$5M additional coverage
Provides additional coverage above your commercial auto liability limits when vehicle accidents result in claims exceeding your primary auto policy. Particularly important given the amount of driving home care employees do and the potential for serious multi-vehicle accidents.
Common Scenarios:
Examples include: Multi-vehicle accident on highway with multiple serious injuries exceeding auto limits, your driver causes accident resulting in permanent disability to multiple people, fatal accident with wrongful death claims exceeding primary coverage, single serious injury exceeds per-person auto limit, or multiple vehicle damages exceed property damage limit.\
What’s Covered:
- Coverage above auto liability limits
- Bodily injury from vehicle accidents exceeding primary
- Multiple injury claims in single accident
- Catastrophic auto accident claims
- Wrongful death claims above auto limits
- Defense costs exceeding primary policy
Provides additional coverage above your workers compensation employer’s liability limits when employees sue for workplace injuries. While workers comp covers most employee injuries, there are situations where employees can sue outside the workers comp system, and employer’s liability limits (typically $100K-$500K) may be insufficient.
Common Scenarios:
Examples include: Employee sues claiming you created unsafe working conditions leading to serious injury, third-party lawsuit where employee injured by client’s family member sues both parties, dual capacity lawsuit where you’re sued as employer and healthcare provider, consequential damages claimed by employee, or loss of consortium claim by employee’s spouse.
What’s Covered:
- Coverage above employer’s liability limits
- Third-party over claims
- Dual capacity lawsuits
- Consequential damages to employees
- Loss of consortium claims
- Defense costs exceeding workers comp limits
Umbrella policies often provide broader coverage than your primary policies, sometimes covering claims that aren’t covered by underlying policies (subject to policy terms). This can include certain coverage gaps or situations where primary policies have sub limits that don’t apply to umbrella coverage.
Common Scenarios:
Examples include: Personal injury claims with higher limits than primary policy sub limits, worldwide coverage when primary only covers US, certain claims excluded from primary but covered by umbrella, defense costs that erode primary limits but not umbrella limits, or gaps between primary policy exclusions and umbrella coverage.
What’s Covered:
- Often broader coverage territory
- May cover some claims excluded from primary
- Higher sublimits for certain coverages
- Defense outside limits (some policies)
- Worldwide coverage (some policies)
- Drop-down coverage if primary exhausted
Why Umbrella Liability Insurance Is Essential for Home Care Agencies
While umbrella insurance isn’t legally required, it’s increasingly essential for home care agencies. Here’s why this extra protection is worth the investment.
Primary Policy Limits May Be Inadequate for Catastrophic Claims
Standard general liability policies typically provide $1-2 million in coverage, and auto policies often max out at $1 million. While these seem like large amounts, catastrophic claims can easily exceed these limits. A single serious injury resulting in permanent disability, a fatal accident with multiple victims, or a high-profile lawsuit can produce claims of $3-5 million or more. Without umbrella coverage, you’re personally responsible for amounts exceeding your primary limits, potentially millions of dollars that could bankrupt your agency and devastate your personal finances.
Lawsuit Costs Are Escalating Dramatically
Medical costs, lost wage claims, and jury awards are all increasing significantly. What might have been a $500,000 settlement 10 years ago could be $2-3 million today. Juries are more sympathetic to injured plaintiffs, especially elderly victims. In home care, where you serve vulnerable populations, jury awards can be particularly high. As lawsuit costs escalate, the risk of exceeding primary policy limits grows. Umbrella insurance ensures you’re protected against these increasing costs.
It Protects Your Business Assets and Personal Wealth
When claims exceed your primary insurance limits, creditors can pursue your business assets, equipment, vehicles, bank accounts, accounts receivable and potentially your personal assets including your home, savings, and investments. If your business operates as a sole proprietorship or partnership, your personal liability is unlimited. Even with an LLC or corporation, plaintiffs’ attorneys often find ways to “pierce the corporate veil” and pursue personal assets. Umbrella insurance protects both your business and personal wealth from devastating claims.
Many Contracts Now Require Higher Liability Limits
Large hospital systems, managed care organizations, and corporate clients increasingly require home care agencies to carry umbrella coverage, typically $2-5 million in total liability protection. If you can’t meet these requirements, you can’t access these lucrative contracts. As the home care industry consolidates and large organizations dominate referral sources, contract requirements become more stringent. Umbrella insurance ensures you can compete for high-value contracts and partnerships.
Umbrella Coverage Is Surprisingly Affordable
Despite providing millions in additional coverage, umbrella insurance is relatively inexpensive. Most home care agencies can purchase $1-2 million in umbrella coverage for $800-$2,000 annually, a small price for such substantial protection. The cost is low because umbrella policies only pay when primary policies are exhausted, making claims relatively rare. For the price of a few hours of revenue, you gain millions in additional protection. It’s one of the best insurance values available.
Real Claims Where Umbrella Coverage Was Essential
Understanding real scenarios where claims exceeded primary coverage helps illustrate why umbrella insurance is essential:
Catastrophic Fall With Permanent Disability
The Incident: A caregiver was assisting a 76-year-old client from wheelchair to bed when the client fell and hit her head on the nightstand. The client suffered severe traumatic brain injury resulting in permanent cognitive impairment and the need for 24/7 care in a nursing facility for the rest of her life. The family sued for negligence.
The Claim: $3.2 million total claim: $1.8 million for lifetime nursing home care, $800,000 for medical expenses and rehabilitation, $600,000 for pain and suffering and loss of quality of life.
The Outcome:
The agency’s general liability policy had a $1 million per-occurrence limit. After a two-year legal battle, the case settled for $2.4 million. General liability paid its $1 million limit, and the umbrella policy paid the remaining $1.4 million. Without umbrella coverage, the agency owner would have been personally responsible for $1.4 million. forcing business closure and personal bankruptcy. The umbrella policy saved the business and the owner’s personal assets.
Multi-Vehicle Fatal Accident
The Incident: An agency driver was traveling on the highway at 65 mph when she became distracted by her GPS. She failed to notice stopped traffic ahead and rear-ended a vehicle, causing a five-car pileup. Two people were killed and three others sustained serious injuries including spinal cord injuries and traumatic brain injuries.
The Claim: $4.8 million in total claims: two wrongful death claims totaling $2.5 million, three serious injury claims totaling $2.3 million.
The Outcome: The commercial auto policy had $1 million combined single limit. The auto insurer paid its full $1 million limit. The umbrella policy, with a $3 million limit, paid an additional $3 million. The remaining $800,000 was negotiated down through structured settlements and payment plans. Without the umbrella coverage, the agency would have owed $3.8 million personally, an impossible amount that would have meant business closure, personal bankruptcy, and financial ruin. The umbrella policy absorbed most of the catastrophic claim.
Multiple Injuries in Single Incident
The Incident: During an agency-sponsored holiday event at a rented venue, a decorative column became unstable and collapsed onto a group of clients and their family members. Four people were seriously injured, including two clients who suffered broken hips, one family member with a spinal injury, and another with a traumatic brain injury.
The Claim: $2.6 million in total claims across four injured parties: $800,000, $650,000, $600,000, and $550,000 for each injured person respectively.
The Outcome: General liability policy limit was $1 million per occurrence, but the policy also had a $2 million aggregate limit. All four claims were part of the same occurrence. The general liability insurer paid $1 million (the per-occurrence limit). The umbrella policy had a $2 million limit and paid the remaining $1.6 million. Without umbrella coverage, the agency would have been $1.6 million short, likely forcing closure. The umbrella policy covered the catastrophic multi-claimant incident.
Employer’s Liability Lawsuit Exceeds Limits
The Incident: A caregiver suffered serious back injuries while transferring a 300-pound client. She underwent surgery but developed complications leading to permanent disability. She sued the agency claiming inadequate training, failure to provide proper equipment, and knowingly assigning her to a client beyond her physical capacity. Her husband also sued for loss of consortium.
The Claim: $1.8 million claim: $900,000 for the employee’s permanent disability and lost future earnings, $400,000 for medical expenses and ongoing care, $500,000 for the husband’s loss of consortium claim.
The Outcome: This wasn’t a standard workers compensation claim—the employee sued under employer’s liability, claiming willful negligence. The workers compensation policy included employer’s liability coverage with a $500,000 limit. After extensive litigation, the case settled for $1.3 million. Employer’s liability paid its $500,000 limit, and the umbrella policy covered the remaining $800,000. Without umbrella coverage, the agency owner would have been personally liable for $800,000. The umbrella policy prevented financial catastrophe.
Umbrella Liability Insurance Claims by the Numbers:
- Percentage of liability claims that exceed $1M: 5-7%
- Average claim that exceeds primary limits: $2.5M-$5M
- Percentage of agencies with claims exceeding primary coverage annually: 2-3%
- Cost of $2M umbrella policy for typical agency: $1,200-$2,000
- Average umbrella claim payout: $1.8M (above primary coverage)
- Most common umbrella claims: Auto accidents (45%), catastrophic injuries (35%), multi-claimant incidents (20%)
Understanding Coverage Limits and Insurance Costs
How Umbrella Insurance Works With Primary Policies
Umbrella insurance doesn’t work independently—it requires underlying primary insurance policies and only responds when those policies are exhausted.
How It Works:
Step 1: Primary Policy Pays First Your general liability, auto liability, or employer’s liability policy pays claims up to its limit.
Step 2: Primary Policy Limit Is Exhausted Once the claim exceeds the primary policy limit, that policy pays its maximum and no more.
Step 3: Umbrella Policy Responds Your umbrella policy then provides additional coverage up to its limit.
Example:
- Claim amount: $2,500,000
- General liability limit: $1,000,000
- Umbrella limit: $2,000,000
Payment breakdown:
- General liability pays: $1,000,000 (its full limit)
- Umbrella pays: $1,500,000 (additional coverage needed)
- Your out-of-pocket: $0 (claim fully covered)
Without umbrella:
- General liability pays: $1,000,000
- Your out-of-pocket: $1,500,000 (could bankrupt you)
Required Underlying Limits:
Umbrella policies require you to maintain minimum limits on primary policies:
- General liability: Typically $1M/$2M minimum
- Auto liability: Typically $500K or $1M minimum
- Employer’s liability: Typically $500K or $1M minimum
If your primary limits are below requirements, you must increase them to qualify for umbrella coverage.
How Much Does Commercial Auto Insurance Cost?
Umbrella policies are available in various limits. Choosing the right amount depends on your business size, assets, and risk exposure.
Common Umbrella Limits:
$1 Million:
- Minimum protection
- Suitable for very small agencies (under $500K revenue)
- Provides basic excess coverage
- Cost: $600-$1,000 annually
$2 Million:
- Standard for small to medium agencies
- Suitable for agencies with $500K-$2M revenue
- Adequate for most home care risks
- Cost: $1,000-$1,800 annually
$3 Million:
- Better protection for growing agencies
- Suitable for agencies with $2M-$5M revenue
- Recommended if you transport clients
- Cost: $1,500-$2,500 annually
$5 Million:
- Comprehensive protection
- Suitable for agencies with $5M+ revenue
- Often required by large contracts
- Recommended for multi-location operations
- Cost: $2,500-$4,000 annually
$10 Million+:
- Maximum protection
- For very large agencies with substantial assets
- Required by some major healthcare systems
- Cost: $5,000-$10,000+ annually
How Much Do You Need?
Consider these factors:
- Business revenue: Many experts suggest 1-2x annual revenue
- Business assets: Enough to protect all business property and accounts
- Personal assets: Protect home equity, investments, savings
- Risk exposure: Higher if you transport clients or have multiple locations
- Contract requirements: Some require $2-5M total liability
- Number of employees: More employees = more risk = higher limits
- Claims history: Prior large claims suggest need for higher limits
General Rule: Most home care agencies should carry at least $2-3 million umbrella coverage, with larger agencies considering $5 million or more.
How Much Does Umbrella Insurance Cost?
- First $1M: $600-$1,200
- Second $1M: $400-$800 additional
- Third $1M: $300-$600 additional
- Fourth $1M: $250-$500 additional
- Fifth $1M: $250-$500 additional
Umbrella insurance is one of the most cost-effective coverages available, providing millions in protection for a relatively small premium.
Pricing Factors:
Limit Amount: Higher limits cost more, but the increase is incremental:
- $1M limit: Base cost
- $2M limit: Add 50-70% to base cost
- $3M limit: Add 100-130% to base cost
- $5M limit: Add 180-250% to base cost
Underlying Policy Limits: Higher primary limits = lower umbrella premium (less risk for umbrella to pay)
Business Revenue: Higher revenue = higher premium
- Under $1M revenue: Lower rates
- $1M-$5M revenue: Moderate rates
- $5M+ revenue: Higher rates
Number of Employees: More employees = more exposure = higher premium
Claims History: Prior large claims or multiple claims increase umbrella premiums significantly
Business Operations:
- Client transportation = higher rates
- Multiple locations = higher rates
- 24/7 operations = higher rates
- Only office-based care = lower rates
Underlying Carriers: Some umbrella insurers prefer (or require) you to have primary policies with them for better rates
Typical Cost Examples:
Small Agency:
- Revenue: $500K
- 5 employees
- No client transport
- $1M umbrella: $600-$900 annually
- $2M umbrella: $1,000-$1,500 annually
Medium Agency:
- Revenue: $2M
- 20 employees
- Some client transport
- $2M umbrella: $1,500-$2,200 annually
- $3M umbrella: $2,000-$3,000 annually
Large Agency:
- Revenue: $8M
- 75 employees
- Regular client transport
- $3M umbrella: $2,800-$4,000 annually
- $5M umbrella: $4,000-$6,000 annually
Cost Per Million: Each additional million of coverage costs less:
Note: These are estimates. Actual costs depend on specific factors. Get your free quote for exact pricing.
Self-Insured Retention vs. Deductibles
Some umbrella policies include a self-insured retention (SIR), which is different from a deductible and important to understand.
What Is Self-Insured Retention (SIR)?
An SIR is an amount you must pay out-of-pocket before umbrella coverage responds to claims that aren’t covered by an underlying policy but are covered by the umbrella.
When SIR Applies:
Scenario 1: Claim covered by both primary and umbrella
- Primary policy pays first up to its limit
- Umbrella pays after primary exhausted
- NO SIR applies
Scenario 2: Claim excluded by primary but covered by umbrella
- Primary policy doesn’t cover this particular claim
- Umbrella DOES cover it (broader coverage)
- You pay the SIR first (typically $10K-$25K)
- Umbrella pays the rest up to umbrella limit
Example:
Your general liability policy excludes a particular type of claim, but your umbrella covers it. The claim is $500,000 and your SIR is $10,000.
You pay: $10,000 (the SIR) Umbrella pays: $490,000 (remainder of claim)
Common SIR Amounts:
- $10,000 (most common)
- $25,000 (higher limits)
- $50,000 (very large policies)
Zero SIR Policies:
Some umbrella policies have no SIR—these are more expensive but eliminate out-of-pocket costs for claims covered solely by the umbrella.
Which Should You Choose?
- Small agencies: Consider zero SIR or $10K maximum
- Medium agencies: $10K SIR is standard
- Large agencies: $25K SIR acceptable if premium savings worthwhile
SIR vs. Deductible:
Deductible:
- Applies to every claim
- You pay, then insurance pays the rest
SIR:
- Only applies to certain claims (those not covered by underlying policies)
- Less common to pay
- Typically doesn’t apply to most claims
Most umbrella claims involve exhausted underlying policies, so SIR rarely comes into play.
What Umbrella Liability Insurance Doesn’t Cover
Umbrella insurance is broad but not unlimited. Understanding exclusions helps ensure you have complete protection.
Professional Liability / Malpractice Claims
Umbrella policies typically don’t provide excess coverage over professional liability or medical malpractice insurance. Professional errors, care mistakes, negligence in service delivery, and malpractice claims aren’t covered by standard umbrella policies. You need adequate professional liability limits as your primary protection for these exposures.
Examples of Excluded Claims:
- Medication administration errors
- Inadequate care or substandard care delivery
- Failure to follow care plans or physician orders
- Documentation errors and record-keeping failures
- Professional negligence claims
Learn about Professional Liability Insurance and carry adequate limits ($1M-$3M minimum). Umbrella won’t help with these claims.
Intentional Harm and Criminal Acts
Umbrella insurance doesn’t cover intentional harm, criminal acts, fraud, or illegal activities. If you or your employees intentionally cause injury or damage, or engage in criminal behavior, umbrella coverage won’t respond. This includes assault, battery, fraud, theft, and other intentional wrongdoing.
Examples of Excluded Acts:
- Intentional assault or battery
- Fraud or embezzlement
- Criminal acts by owners or employees
- Intentional property damage
- Sexual abuse or molestation (requires separate coverage)
Learn about Sexual Abuse & Molestation Coverage for separate protection against abuse allegations. Implement strong background checks and supervision to prevent intentional misconduct.
Workers Compensation Claims
Umbrella policies don’t provide excess coverage over workers compensation for standard employee injury claims. If an employee is injured on the job and files a workers comp claim, umbrella insurance doesn’t respond. However, umbrella may provide excess coverage for employer’s liability claims (when employees sue outside workers comp system).
Examples of Excluded Claims:
- Standard workers comp injury claims
- Medical expenses for injured employees
- Lost wage benefits
- Rehabilitation costs
- Permanent disability benefits
Learn about Workers Compensation Insurance with adequate employer’s liability limits. Umbrella MAY provide excess employer’s liability but not excess workers comp benefits.
Property You Own, Rent, or Occupy
Umbrella policies typically don’t cover damage to property you own, rent, or occupy. If your agency vehicle is damaged, your office building is damaged, or you damage a rented space, umbrella insurance won’t cover the property damage. You need property insurance for these exposures.
Examples of Excluded Claims:
- Damage to your office building
- Your own vehicle damage (need physical damage coverage)
- Damage to rented or leased space you occupy
- Your business property (equipment, supplies)
- Improvements to leased space
Maintain adequate physical damage coverage on vehicles and commercial property insurance for buildings and business property. Umbrella covers what you owe others, not damage to your own property.
Cyber Liability and Data Breaches
Umbrella policies don’t provide coverage for cyber liability, data breaches, ransomware attacks, or HIPAA violations from cyber incidents. These specialized exposures require dedicated cyber liability insurance.
Examples of Excluded Claims:
- Data breaches exposing client information
- Ransomware and cyber extortion
- HIPAA violation penalties and notification costs
- Network security failures
- Electronic medical record breaches
Learn about Cyber Liability Insurance as these risks are entirely separate from traditional liability exposures covered by umbrella policies.
Getting Umbrella Liability Coverage for Your Home Care Business
- Step 1Assess Your Total Liability Exposure:
Before purchasing umbrella insurance, determine how much total liability coverage you need based on your business and personal assets at risk.
What to Consider:
Business Assets:
- Annual revenue (rule of thumb: 1-2x revenue in total coverage)
- Equipment and vehicle values
- Business bank accounts and accounts receivable
- Real estate or buildings owned
- Total value of all business assets
Personal Assets:
- Home equity
- Personal savings and investments
- Retirement accounts (may be protected, varies by state)
- Other personal property
Risk Factors:
- Do you transport clients? (Higher risk)
- Number of employees (more = more exposure)
- Number of vehicles
- Number of locations
- Services provided (skilled vs. non-medical)
- Annual miles driven
Contract Requirements:
- Do current or potential contracts require specific limits?
- What are competitors carrying?
Example Assessment:
Small agency:
- Revenue: $800K
- Business assets: $150K
- Personal assets: $300K home equity
- 8 employees, no client transport Recommended: $2M total liability ($1M primary + $1M umbrella)
Large agency:
- Revenue: $6M
- Business assets: $1.2M
- Personal assets: $800K
- 60 employees, regular client transport Recommended: $5-7M total liability ($2M primary + $3-5M umbrella)
- Step 2Review Your Current Primary Policy Limits:
Umbrella insurance requires adequate underlying coverage limits. Review your current policies to ensure they meet umbrella carrier requirements.
Check Your Current Limits:
General Liability:
- Current per-occurrence limit: $______
- Current aggregate limit: $______
- Umbrella typically requires: $1M per occurrence minimum
Commercial Auto Liability:
- Current per-accident limit: $______
- Umbrella typically requires: $500K-$1M minimum
Employer’s Liability (Part of Workers Comp):
- Current limit: $______ (often $500K or $1M)
- Umbrella typically requires: $500K-$1M minimum
Professional Liability (if required):
- Note: Umbrella typically doesn’t sit over this, but some carriers want to know you have it
Gaps to Address:
If your primary limits are below umbrella requirements:
- Option 1: Increase primary policy limits before adding umbrella
- Option 2: Some umbrella carriers offer “drop down” to fill gaps (more expensive)
Example:
Your current auto liability is $300,000, but umbrella requires $500,000 minimum.
Solution: Increase auto liability to $500,000 (might cost $300-600 more annually), then add umbrella coverage.
Cost/Benefit:
Increasing primary limits is usually cost-effective:
- Increasing GL from $1M to $2M: $200-500 more annually
- Adding $2M umbrella over $2M primary: $1,000-1,800 annually
- Total additional cost: $1,200-2,300 for $2M extra protection
- Step 3Gather Required Information:
Umbrella insurance applications require detailed information about your business operations and existing insurance.
Information You’ll Need:
Business Information:
- Legal business name and structure
- Years in business
- Number of locations
- Annual revenue
- Number of employees
- Description of operations
Current Insurance Information:
For Each Policy:
- Carrier name
- Policy number
- Coverage limits
- Expiration dates
- Current declarations pages
Need copies of:
- General liability declarations
- Commercial auto declarations
- Workers comp declarations (employer’s liability limits)
- Professional liability declarations (if applicable)
Claims History:
- All liability claims past 5 years
- Claim amounts and status (settled, pending, closed)
- Description of each incident
- Total losses paid
Additional Operations:
- Do you transport clients? How many annually?
- Do you own or rent real estate?
- Do you have any unusual operations?
- Any high-hazard activities?
Assets to Protect:
- Total business assets
- Personal assets (home value, savings, investments)
- This helps determine appropriate umbrella limits
- Step 4Compare Umbrella Quotes and Policy Features:
Umbrella policies can vary in coverage breadth, requirements, and pricing. Compare multiple quotes to find the best protection.
What to Compare:
Coverage Limits:
- Limit options available ($1M, $2M, $3M, $5M, $10M)
- Per-occurrence and aggregate limits
- Whether limit is “all risks” combined or separate per underlying policy
Self-Insured Retention:
- SIR amount ($0, $10K, $25K)
- When SIR applies
- Zero SIR vs. SIR premium difference
Underlying Policy Requirements:
- Minimum GL limits required
- Minimum auto limits required
- Minimum employer’s liability limits required
- Whether you must place primary coverage with umbrella carrier
Coverage Breadth:
- What’s covered beyond underlying policies
- Coverage territory (US only vs. worldwide)
- Additional insureds included
- Defense outside limits or inside limits
Pricing:
- Premium for desired limit
- Multi-policy discount if bundling with primary coverage
- Payment options
- How premium changes with higher limits
Carrier Quality:
- Financial strength rating (A.M. Best A- or better)
- Claims handling reputation
- Experience with home care industry
Special Provisions:
- Drop-down coverage if primary exhausted for any reason
- Broader coverage than underlying for some claims
- Whether it follows underlying policy forms or provides broader coverage
- Step 5Coordinate Coverage and Maintain Protection:
After purchasing umbrella coverage, ongoing coordination with your primary policies is essential to maintain protection.
Ongoing Requirements:
Maintain Underlying Limits:
- Never reduce primary policy limits below umbrella requirements
- If you do, umbrella carrier may cancel coverage
- Notify umbrella carrier before making any changes
Coordinate Renewals:
- Umbrella and primary policies should have same effective dates
- If dates differ, you risk coverage gaps
- Coordinate renewals to prevent lapses
Update Umbrella When Adding Vehicles:
- Notify umbrella carrier when you add vehicles to auto policy
- May need to adjust umbrella premium
- Ensures new vehicles are covered
Report Material Changes:
- Significant revenue increases
- Adding new locations
- Starting client transportation
- Acquiring another business
- Any major operational changes
Provide Certificates When Needed:
- Keep umbrella certificates current
- Provide to contracts requiring umbrella coverage
- Include umbrella limits on certificates
Annual Review:
- Review umbrella limits annually
- As business grows, increase umbrella limits
- Reassess total liability needs
- Shop for better rates every 2-3 years
Claims Reporting:
- Report all serious incidents to umbrella carrier
- Even if claim doesn’t exhaust primary limits
- Early notification protects your rights
- Umbrella carrier may provide guidance
Ready to protect your home care agency with umbrella liability insurance? Our specialists will assess your needs, review your underlying coverage, and find you comprehensive umbrella protection at competitive rates
Additional Insurance Your Home Care Agency May Need
Umbrella insurance works best as part of a comprehensive insurance program. Here are the primary policies that work underneath umbrella coverage:
General Liability Insurance
Your foundation coverage for bodily injury and property damage. Must maintain minimum $1M limits to qualify for most umbrella policies. This is your primary defense before umbrella responds.
Commercial Auto Insurance
Covers vehicle accidents involving company-owned vehicles. Must maintain minimum $500K-$1M limits for umbrella coverage. Critical underlying policy if you own vehicles.
Professional Liability Insurance
Covers professional negligence and care errors. While umbrella typically doesn’t sit over professional liability, you still need adequate limits ($1M-$3M minimum) for complete protection.
Umbrella insurance provides excellent excess coverage, but only when you have adequate underlying policies. Contact us for a comprehensive insurance package with properly structured primary and umbrella coverage.
Umbrella Liability Insurance FAQs for Home Care Agencies
Yes, especially as your agency grows. While primary coverage handles most claims, catastrophic incidents can and do happen. A serious accident with multiple injuries, a fatal incident, or permanent disability can easily result in claims of $2-5 million. Without umbrella coverage, you’re personally liable for amounts exceeding your primary limits—potentially millions of dollars. For $1,000-2,000 annually, umbrella insurance protects against this devastating scenario. As one agency owner said after a $3M claim, “Best $1,500 I ever spent.” It’s not a matter of if a catastrophic claim will happen in the industry, but when and whether you’ll be protected.
The terms are often used interchangeably, but there’s a technical difference. Umbrella insurance provides coverage over multiple underlying policies (GL, auto, employer’s liability) and often provides broader coverage than the underlying policies. Excess liability simply provides additional limits over one specific policy (like $2M excess over your $1M general liability). Umbrella is more comprehensive and flexible. For home care agencies, umbrella is almost always the better choice because it covers multiple underlying policies and may fill some coverage gaps.
Most standard umbrella policies exclude professional liability / malpractice coverage. You cannot get umbrella excess over your professional liability policy with a standard umbrella. If you need higher professional liability limits (above $1M-$3M), you must purchase higher primary professional liability limits or specialized healthcare excess liability coverage. This is why home care agencies need adequate professional liability limits in their primary policy—umbrella won’t help if those limits are inadequate.
This is exactly when umbrella insurance proves its value. Once your primary policy pays its full limit (is “exhausted”), your umbrella policy responds and begins paying the remaining claim amount up to the umbrella limit. For example, if your general liability pays its $1M limit and the claim total is $2.5M, your $2M umbrella policy pays the remaining $1.5M. Without umbrella, you’d be personally responsible for that $1.5M. This protection against exhausted primary policies is the core purpose of umbrella insurance.
Not always, but it often provides advantages. Some umbrella carriers require you to place primary policies with them for better rates and broader coverage. Others will write umbrella over primary policies from different carriers. Advantages of same carrier: streamlined claims handling, potential package discounts (10-25%), simplified administration, and sometimes broader coverage. Advantages of separate: potentially lower premium if you shop competitive rates, flexibility to choose best carrier for each coverage. For most home care agencies, bundling primary and umbrella with one carrier saves money and simplifies management.
Most experts recommend total liability coverage (primary + umbrella) equal to 1-2x your annual revenue or enough to protect your total business and personal assets. For home care agencies: Small agencies (under $1M revenue): $2M total ($1M primary + $1M umbrella). Medium agencies ($1M-$5M revenue): $3-5M total ($1-2M primary + $2-3M umbrella). Large agencies ($5M+ revenue): $5-10M total ($2M primary + $3-8M umbrella). If you transport clients or have prior claims, consider higher limits. Contract requirements may also dictate minimums.
Yes, large claims that involve umbrella payouts will significantly impact your premiums at renewal, and the increase applies to both your primary policies and umbrella. A $2M umbrella claim could result in 50-100%+ premium increases across all policies. Some carriers may non-renew after umbrella claims. This is why prevention is critical—implement strong safety programs, driver training, and risk management to avoid claims. However, remember that the alternative to higher premiums is paying millions out of pocket, which would destroy your business. The premium increase is far better than bankruptcy.
Technically yes, but umbrella is usually more cost-effective. Increasing general liability from $1M to $3M might cost $800-1,500 more annually and only increases GL—not auto or employer’s liability. A $2M umbrella costs $1,000-1,800 and provides excess coverage over ALL your liability policies (GL, auto, employer’s liability). Umbrella also may provide broader coverage than primary policies and cover some gaps. For maximum protection at the best value, most agencies should carry $1-2M primary limits and add $1-3M umbrella rather than buying very high primary limits alone.
Have more questions about umbrella liability insurance? Contact our specialists for personalized guidance.
Protect Your Business With Umbrella Liability Coverage
Don’t risk catastrophic financial loss by operating without umbrella liability coverage. When serious claims exceed your primary insurance limits, you’re personally liable for the difference, potentially millions of dollars. Umbrella insurance provides an affordable safety net that protects your business and personal assets from devastating claims.
We specialize in comprehensive insurance programs for home care agencies, including properly structured umbrella coverage over strong underlying policies. We’ll assess your total liability exposure and design a program that provides maximum protection at competitive rates. Licensed in all 50 states.
Expert Assessment
We’ll review your current coverage and recommend appropriate umbrella limits
Package Discounts
Save 10-25% by bundling umbrella with primary policies through one carrier
Millions in Protection
Get $1-5M in additional coverage for just $1,000-3,000 annually
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