Yes, in most cases. One closed claim in the last five years rarely stops a contractor from getting an umbrella. Several claims, or one large claim that is still open, usually pushes you to specialty insurers at a higher price rather than to a flat no. Who this is for: contractors with something on their claims history who need an umbrella for a contract.
The short version
- One closed claim in five years rarely stops an umbrella. Several claims, or one large open claim, raises the price.
- Insurers read five years of your claims history. Get your own copy first and check it for errors.
- A one page letter explaining what happened and what changed helps more than most owners expect.
- Expect specialty insurers, a minimum premium, and sometimes a share of each claim you pay yourself.
- Time helps. Most insurers only ask for five years, so shop again at every renewal.
How do umbrella insurers look at my claims history?
An umbrella is a second layer of coverage above your general liability, auto, and workers comp liability policies. It usually pays only when one of those is used up. A true umbrella can also be a little broader, and where it covers a claim they do not, it pays first after you pay a set amount yourself. So the insurer asks one question: has this business shown it can produce a very large claim?
To answer it, the insurer asks you for five years of loss runs, your claims history report from each insurer you have had. Only you or your broker can request them, so a slow prior insurer can stall the submission. The insurer looks at how many claims you had, how big each was, and whether any are open. An open claim counts at the amount the insurer has set aside, even if nothing has been paid. Claims on every policy underneath count, so a bad auto accident matters as much as a job site injury.
| Your last five years | What most insurers do | Illustrative effect on price |
|---|---|---|
| No claims | Standard and specialty insurers both quote | Baseline |
| One closed claim under $25,000 | Standard insurers quote | Little or none |
| Two or three small closed claims | Some standard insurers pass, specialty insurers quote | Roughly 15 to 40 percent more |
| One large closed claim, over $100,000 | Mostly specialty insurers | Roughly 25 to 75 percent more |
| One large claim still open | Many decline, specialty insurers quote with conditions | Often 50 to 100 percent more, or a share you pay yourself |
| A claim that reached a prior umbrella | Very few insurers, all specialty | Case by case |
These ranges are illustrative. Your trade, payroll, state, residential share, and the story behind each claim move the number.
What can I do to improve my chances?
- Pull your own reports first. Ask each insurer for five years, currently valued, on every policy. Errors are common. A claim that closed for a few thousand dollars may still show a $50,000 reserve. Here is how.
- Close what can be closed. A closed claim with a final number reads far better than an open one with a guess.
- Write a one page letter. For each claim: what happened, why it will not happen again, and what you changed. Underwriters read these letters.
- Show your paperwork. Signed subcontractor agreements, certificates, and a written safety program tell the insurer the next claim is less likely.
- Apply once, completely. A blank answer next to a claim looks like something hidden.
What will an umbrella cost me with claims on my record?
All the figures here are illustrative and move with your trade, payroll, state, and the story behind each claim. Take an electrical contractor with eight employees and a clean record. A $1,000,000 umbrella might run $1,200 to $2,500 a year. Add one closed $180,000 claim and it often lands at $2,500 to $4,500 from a specialty insurer. Add a large open claim and you may see $4,000 or more. You may also be asked to pay the first part of certain claims yourself, often $10,000, before the umbrella pays. That share usually applies only to claims your other policies do not cover at all, and some insurers apply it only to the kind of claim you had.
Two other things change. Specialty insurers set a minimum premium, illustratively $2,500 to $5,000 for a $1,000,000 layer. And the policy may add exclusions tied to your claim. A contractor with a water damage claim may see a water damage exclusion, so read them against your contract. See how specialty insurers work.
How long will my claims hold me back?
Most insurers only ask for five years, so a claim from six years ago usually is not in the file they price. It has not disappeared, though. Applications often ask whether you have ever had a very large claim or one that reached an umbrella, and you have to answer honestly whatever the date. Your options improve every year, so reshop at each renewal with fresh reports. See why umbrella insurers decline contractors.
What this looks like in real life
Illustrative example. It is typical of what we see and is not a promise of how any specific situation would be handled.
The setup: A heating and cooling contractor in Arizona with 11 employees needs a $2,000,000 umbrella for a hospital renovation. His claims history shows a 2023 van accident closed at $210,000, and a 2025 water damage claim listed as open with a $45,000 reserve.
What went wrong: The broker requests fresh reports. The water damage claim actually closed four months ago for $12,000, but the report was never updated. She gets a corrected copy, then writes a one page letter: the van driver was let go, every vehicle now has a camera, and all drivers completed training.
What it cost: A specialty insurer quotes the $2,000,000 umbrella at $6,400 a year. A clean record would likely have priced near $3,300. All figures here are illustrative, so the claims cost roughly $3,100 a year extra, and the whole process took eight business days.
The fix: The open claim that scared off the first insurer was already closed. Check your own claims history before anyone else does, and tell the story of what changed.
Frequently asked questions
Q: Can I get commercial umbrella insurance if my business has had claims?
Yes, in most cases. One closed claim in the last five years rarely blocks an umbrella. Several claims, or one large claim still open, usually means a specialty insurer and a higher price rather than a decline.
Q: How many years of claims do umbrella insurers look at?
Five years is standard, on every policy the umbrella will sit over. They want reports pulled recently, not last year's copy.
Q: Does a workers comp claim affect my umbrella?
Somewhat. The umbrella sits above the part of workers comp that pays if an employee sues you, so injury claims matter. A pattern of employee injuries also tells the insurer a big claim is more likely.
Q: Will an open claim stop me from getting an umbrella?
It makes it harder, especially if the reserve is large. Ask your insurer where the claim stands and whether it can close. If not, expect specialty insurers and possibly a share of each claim you pay yourself.
Q: What should I write in a letter about my claims?
Keep it to one page. Say what happened in plain words, why it will not happen again, and name the specific fix, like new fall protection or driver training.
Q: The claim was not my fault. Does that matter?
It helps, and it belongs in your letter. But insurers price what was paid out, not who was to blame, so a large claim caused by a subcontractor still shows on your record. Signed subcontractor agreements and certificates keep the next one off it.
How Morrow helps
Morrow is a licensed independent commercial insurance brokerage that works with contractors and trades every day. Placing umbrellas for contractors with claims on their record, and telling the story behind those claims to the right insurers, is something we do often.
- Free contract review. Send us the contract or bid documents and we mark up the insurance section in plain English, whether or not you buy anything from us.
- Free, instant certificates. Clients issue their own certificates of insurance online in about a minute, any hour, any day, at no charge.
- Markets you cannot reach online. One application, shopped across many insurance companies for general liability, workers comp, auto, umbrella, and pollution coverage.
One more thing. This article is general information and is not legal advice or a statement of coverage. Your contract and your policy wording control in every case. Requirements vary by customer, by state, and by insurance company, so have a licensed advisor review your own contract and your own policy before relying on any of it.
Last updated: Reviewed by the Morrow commercial lines team. Last updated September 2026.