Two places: your own liability insurer, or an independent broker. Ask your insurer first for $1,000,000 or $2,000,000, and use a broker when they say no or the contract wants $5,000,000 or more. In New Jersey an umbrella can also be part of how you meet the $1,500,000 limit the state requires on trucks over 26,000 pounds. Who this is for: New Jersey contractors whose contract asks for more liability than their current policies provide.
The short version
- Start with the company that writes your general liability. Many will add $1,000,000 to $2,000,000 of umbrella on top.
- If they say no, or the contract wants $5,000,000 or more, a broker builds the limit from specialty markets, sometimes in layers.
- Before an umbrella will sit on top, the policies underneath usually need $1,000,000 general liability and $1,000,000 auto. The workers comp part that pays if an employee sues you needs $500,000 or $1,000,000 on each of its three limits.
- In New Jersey, trucks over 26,000 pounds need $1,500,000 of liability, and an umbrella can be part of that. Work in New York City brings extra underwriting questions.
- A policy from a specialty insurance company, one that writes what standard companies will not, carries a 5 percent New Jersey tax on top of the premium.
Where do New Jersey contractors actually buy an umbrella?
An umbrella (also called excess liability) is a second layer of coverage that sits above your general liability, your auto, and the part of workers comp that pays if an employee sues you, which insurers call employers liability. It usually pays after those policies hit their limit. A true umbrella can also be broader, and can pay a claim the policy below it does not cover once you pay a set amount yourself. A follow form excess policy only sits on top and is never broader than what is under it.
| Source | Typical limit | Good fit | Watch out |
|---|---|---|---|
| Your general liability insurer | $1,000,000 to $2,000,000 | Most trades with a clean claims history. Fastest and often cheapest. | Many stop at $2,000,000 for contractors. Some will not write roofing, demolition, or work at height. |
| Independent broker, standard companies | $1,000,000 to $5,000,000 | Contractors whose own insurer said no, or who want to compare prices. | Needs a full application and your claims history. |
| Independent broker, specialty markets | $5,000,000 to $10,000,000 and up | Large contracts, hard trades, past claims, or New York City work. | Specialty (surplus lines) companies write what standard ones will not. New Jersey adds a 5 percent tax on that premium. |
| Online insurer | Usually $1,000,000 | Very small, low risk trades. | Most will not quote contractors at all. |
The national guide covers the general mechanics: where to get commercial umbrella insurance for a contracting business.
What do I need in place before an umbrella will attach?
An umbrella sits on top of other policies, so the insurer sets minimum limits for the policies underneath. If yours are lower, you raise them first.
| Underlying policy | Limit most umbrella insurers want | New Jersey note |
|---|---|---|
| General liability | $1,000,000 per occurrence (the most paid for one incident), $2,000,000 aggregate (the most paid in a year) | Home improvement contractor registration requires at least $500,000 per occurrence. Most registered contractors already carry $1,000,000. |
| Commercial auto | $1,000,000 combined single limit | The state minimum since January 1, 2026 is $35,000 per person, $70,000 per accident, and $25,000 property damage. Far too low for an umbrella to attach. |
| Employers liability | $500,000 or $1,000,000 on each of the three limits: each accident, the policy limit for disease, and each employee for disease | The part of workers comp that pays if an employee sues you. Raising it is usually cheap. |
What is different about umbrella insurance in New Jersey?
Heavy trucks. Since July 1, 2024, commercial trucks garaged in New Jersey with a gross vehicle weight rating over 26,000 pounds must carry $1,500,000 of liability, and trucks of 10,001 to 26,000 pounds must carry $300,000. New Jersey law lets you meet those limits with a commercial auto policy, an umbrella or excess policy, or any combination. A $1,000,000 auto policy plus a $1,000,000 umbrella is a common way to get there. If that is why you carry the umbrella, do not drop it at renewal.
Work in New York. New York's Labor Law makes owners and contractors absolutely liable for gravity related injuries on construction sites, such as falls from scaffolds and ladders. New Jersey has no equivalent law, but the New York rule follows the job site. A New Jersey contractor working in New York City is exposed on that work, so expect insurers to ask how much of your payroll is in New York, and to price it separately. Tell your broker about any New York work up front.
Specialty markets and the tax. When a New Jersey umbrella is placed with a surplus lines company, the premium carries a 5 percent premium receipts tax that the broker collects and cannot absorb. Nationally, very large jury verdicts have pushed contractor umbrella prices up. That is a national trend, not a New Jersey figure, but it shapes what New Jersey contractors pay.
Illustrative national ranges for a small contractor with a clean claims history, not New Jersey figures. What moves them: your trade, payroll, revenue, vehicles, claims history, and the insurer.
| Limit | Illustrative annual premium | Notes |
|---|---|---|
| $1,000,000 | $600 to $2,500 | Roofing, demolition, and work at height cost more. |
| $2,000,000 | $1,200 to $4,500 | Often the ceiling from a standard insurer. |
| $5,000,000 | $3,000 to $12,000 | Often two layers from two companies. |
| $10,000,000 | $7,000 to $25,000 | Specialty markets, plus the 5 percent tax on that layer. |
If price is the problem, see how to find cheaper commercial umbrella insurance in New Jersey.
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 Edison with eight employees signs a $900,000 mechanical subcontract on a warehouse in Newark. The general contractor's exhibit asks for a $5,000,000 umbrella. The contractor has a $1,000,000 umbrella from the company that writes his general liability, and that company will not go above $2,000,000 for heating and cooling work.
What went wrong: He tries two online insurers. Neither will quote a contractor with eight employees and a fabrication shop. The start date is three weeks away.
What it cost: Illustrative numbers: his own insurer raised the umbrella to $2,000,000 for about $3,400 a year. A broker placed a $3,000,000 layer above it with a specialty market for about $5,200, plus the 5 percent New Jersey surplus lines tax of $260. Total for $5,000,000: about $8,860 a year, against a $900,000 contract.
The fix: Layering is normal. The broker shopped the top layer once with one application and had the certificate to the general contractor twelve days later, in time for the start date.
Frequently asked questions
Q: Where can I get commercial umbrella insurance for my New Jersey business?
Ask the insurance company that writes your general liability first. Many add $1,000,000 or $2,000,000. If they decline, or you need $5,000,000 or more, an independent broker shops standard and specialty markets for you. Morrow does this for New Jersey contractors.
Q: Can I buy an umbrella from a different company than my general liability?
Yes. Umbrellas are often written by a different company than the policies underneath. The umbrella insurer will want to see the limits of your general liability, auto, and employers liability before it agrees to sit on top.
Q: Why do umbrella insurers ask about work in New York?
New York's Labor Law makes owners and contractors absolutely liable for gravity related construction injuries, and it follows the job site. A New Jersey contractor working in New York City is exposed on that work, so insurers price New York payroll separately and some will not quote it at all.
Q: What is the extra 5 percent on my umbrella quote?
If the umbrella is placed with a specialty (surplus lines) insurance company, New Jersey charges a 5 percent premium receipts tax. The broker collects it with the premium and is not allowed to absorb it. Standard company policies do not carry it.
Q: How much does a $5,000,000 umbrella cost in New Jersey?
Illustratively, about $3,000 to $12,000 a year for a small contractor with a clean claims history. It is often built from two layers placed with two companies.
Q: How fast can I get an umbrella in New Jersey?
One day to two weeks for $1,000,000 or $2,000,000 from your own insurer. One to three weeks for higher limits, because specialty markets want a full application, five years of loss runs (your claims history report from your insurer), and copies of the policies underneath.
How Morrow helps
Morrow is a licensed independent commercial insurance brokerage that works with contractors and trades every day. Placing umbrella limits for New Jersey contractors whose own insurer stopped at $1,000,000 or $2,000,000 is one of the things we do most.
- 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.