Why Every Michigan Contractor Needs $5M in Umbrella Coverage (And What Happens When They Don’t)

And what happens when they don’t.

A roofing crew is wrapping up a tear-off on a residential job. One of the guys leaves a ladder leaning against the side of the house.

A neighbor’s kid — eight years old — climbs it, falls off the roof, and breaks his back in three places.

The lawsuit comes fast.

The judgment comes faster.

The number? $3.2 million.

The roofer had $1 million in general liability and a $1 million umbrella. He thought he was covered.

He wasn’t even close.

The remaining $1.2 million came out of his business assets, then his personal savings, then his house. Twenty-two years of building a roofing company — gone in eleven months.

That’s not a horror story made up to scare contractors into buying more insurance. That’s the math of this industry today.

And it’s exactly why every contractor in Michigan needs at least $5 million in umbrella coverage — not $1 million, not $2 million.

Five.

What an Umbrella Actually Does (In Plain English)

Most contractors think umbrella insurance is some optional luxury — like the extended warranty on a microwave.

They’re wrong.

Your general liability policy probably has a $1 million per-occurrence limit. Your commercial auto might have $1 million. Your workers comp covers your guys, but not third parties.

An umbrella policy sits on TOP of all of that. When a judgment blows through your underlying policy limits, the umbrella picks up the rest — up to whatever limit you bought.

THE $3.2M MATH

If that roofer had a $5M umbrella:

$1M GL takes the first million
$5M umbrella covers the next $2.2M
He keeps his business. His savings. His house. His sanity.

Instead, he had a $1M umbrella.

The math didn’t work.
The math almost never works at $1M anymore.

Why $5 Million Is the New $1 Million

I’ve been in this industry for over fifteen years. When I started, a $1M umbrella was considered solid coverage for most contractors.

Today? It’s a band-aid on a bullet wound.

Three things changed:

1. Jury verdicts exploded.

In Michigan, the average jury award for serious bodily injury cases has more than doubled in the last decade. Multi-million dollar verdicts that were rare in 2010 are routine in 2026.

2. Plaintiff attorneys got smarter.

They don’t just go after the contractor anymore. They go after the GC, the property owner, the subs — anyone with a pulse and a policy. If you’re working on someone else’s job and something goes wrong, you’re getting named in the suit. Period.

3. Costs went vertical.

A serious back injury that cost $400K to litigate in 2015 costs $1.2M today. Same injury. Same surgery. Triple the bill.

“A $1M umbrella protected against the world of 2010. A $5M umbrella protects against the world of today. It’s not paranoia. It’s math.”

“But My Premium Will Be Insane”

This is the part most contractors get wrong.

They assume umbrella coverage is expensive. It’s the opposite.

Umbrella insurance is the cheapest coverage per dollar of protection you’ll ever buy. For most Michigan contractors, the premium jump from $1M to $5M is surprisingly small — often well under $50 a week, depending on operations, claims history, and underlying limits.

Let me say that again because it’s important:

You can quintuple your liability protection for under $50 a week.

Compare that to:

Reality	Cost
Emergency lawyer retainer	$25,000+ minimum
Six months of billable defense hours	$150,000+
The judgment itself	Potentially seven figures
Replacing your business when it’s gone	Priceless / impossible

There is no other line item in your business where $50 a week buys you that much protection. None.

What Most Agents Won’t Tell You

Here’s the truth most insurance agents don’t want their contractor clients to know:

Most contractor policies are underwritten to protect the carrier — not the contractor.

Standard contractor packages come with bare minimum umbrella limits because that’s what fits the standard quote. The agent quotes you $1M umbrella because it’s easy to sell, easy to bind, and keeps your premium low enough to win against the next agent shopping you.

But here’s the thing: when something goes wrong — and in construction, something always goes wrong eventually — that $1M umbrella isn’t going to save your business.

It just isn’t.

At The Salvati Insurance Group, we don’t play that game. We’ve been writing Michigan contractors since 2010. We’ve seen what happens when policies fail.

“We don’t sell the policy that gets us bound. We sell the policy that actually protects you.”

That means having the hard conversation about umbrella limits. About excess coverage. About contractual liability. About the additional insured endorsements you need on every job. About whether your subs are actually carrying the limits your contracts require.

If your current agent has never walked you through this conversation, you don’t have an agent. You have a salesperson.

The 3 Questions to Ask Your Agent Today

Pull out your declarations page right now. Check these three things.

1. What’s my umbrella limit?

If it’s $1M or $2M, you’re underinsured for the world we live in. Period.

2. Do my underlying limits match my umbrella requirements?

Umbrella policies require minimum underlying limits on your GL, auto, and employers liability. If those underlying limits are too low, your umbrella won’t drop down to cover gaps. You think you’re protected. You’re not.

3. Am I named as an Additional Insured on my GCs’ policies?

And are they named on yours? When you’re working on someone else’s project, the contractual liability exposure runs both ways. If neither agent has explained this — you’ve got a real problem.

The Conversation You Don’t Get to Have Twice

I’ve sat across the desk from more than one contractor who lost everything because they were under-insured. Different names. Different stories. Same ending.

The conversation is always the same. They say some version of this:

“If I could go back, I’d have paid the extra $1,800 a year without thinking twice. I had it. I just thought I was covered. The thing nobody tells you is that you don’t get to make this choice twice. You make it before something happens, or you don’t get to make it at all.”

They’re right.

Insurance is a one-shot decision. You can’t go back and increase your limits after the lawsuit gets filed. The protection you have on the day of the loss is the only protection you’ll ever get.

Don’t be that contractor.

Without Protection, Legacy Is Just Memory

That’s our agency’s tagline.

It’s not marketing language. It’s the truth.

You’re working sixty-hour weeks to build something. Your name on the truck. Your reputation in the community. A business you might pass down to your kids someday. Maybe a retirement that doesn’t include a nail gun at 65.

That’s legacy. That’s what insurance protects.

A $5 million umbrella policy isn’t a luxury. It’s the bare minimum cost of admission to being a contractor in 2026 and not losing everything you’ve built to one bad day.

Ready for a Real Conversation?

If your current policy doesn’t cover you at that level — or if you don’t even know what level you’re covered at — that’s a conversation worth having today, not next week.

We’ll review what you have. Tell you exactly where you’re exposed. Quote you what real protection actually costs.

No pressure. No sales pitch. Just the truth.

Because in this business, the truth is the only thing that holds up when everything else goes sideways.

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