EXCAVATION INSURANCE GROUP
When GCs Require Higher Limits Than Your Base Policy
Excavation Insurance Group explains why general contractors and public owners request limits above standard GL, and how to see it coming before a bid gets rejected.
- Independent Agency, 20+ Years Experience
- Licensed Guidance in All 50 States
- No-Pressure Coverage Review
Quick answer: Excavation Insurance Group hears this from contractors constantly: a bid packet lands with a limits requirement well above what their current policy carries, and now it’s a scramble instead of a planned coverage decision. Here’s why GCs and public owners ask for more than base General Liability limits, and what tends to trigger it.
WHY A GC’S RISK MANAGER ASKS FOR MORE THAN $1M/$2M
General contractors and municipal owners aren’t picking limits requirements arbitrarily. They’re sizing the requirement to the scope and location of the work, and to their own exposure if a subcontractor’s mistake causes damage on their project. A GC managing a large commercial site or a public infrastructure job carries real financial exposure if a sub’s utility strike or cave-in generates a claim their sub’s policy can’t fully pay. Requiring $3 million, $5 million, or a “GL plus Umbrella” combination is the GC’s way of pushing that exposure back onto the sub’s insurance program instead of their own.
The size of the ask usually scales with three things: the total contract value, the proximity to occupied structures or live utilities, and whether a public entity is involved (public contracts tend to carry stricter, non-negotiable insurance schedules than private commercial work).
WHAT THE REQUIREMENT ACTUALLY LOOKS LIKE ON A BID PACKET
Most contractors see this requirement in one of a few standard forms. A straightforward version simply states a higher per-occurrence limit, “$3,000,000 per occurrence.” A more common version splits it into a base plus excess layer, something like “$1,000,000 GL per occurrence, $2,000,000 GL aggregate, plus $4,000,000 Umbrella/Excess,” which is language describing exactly the tower structure discussed on the hub page. Either way, this is a bid condition, not a suggestion, and a Certificate of Insurance that doesn’t match the requested limit gets your bid flagged or rejected outright, regardless of price or qualifications otherwise.
| Contract Type | Common Combined Limit Requested |
|---|---|
| Small private/residential site work | $1M / $2M GL, no excess typically required |
| Commercial GC subcontract | $1M/$2M GL + $2M-$4M Umbrella is common |
| Municipal or public infrastructure work | $2M/$4M GL + $5M Umbrella or higher, frequently mandatory |
| Utility-adjacent or DOT right-of-way work | $5M combined or more, plus utility-damage endorsement |
GETTING AHEAD OF IT INSTEAD OF REACTING TO IT
The contractors who lose the least time and money to this issue are the ones who add excess or umbrella limits before a bid packet forces the question, as part of a normal coverage review rather than a last-minute scramble against a submission deadline. Since standard excess tiers are typically sold in increments of $1 million, $2 million, and $5 million above the underlying policy, most programs can be scaled up without a full rewrite, but that only works if the request comes in with enough lead time to actually bind the layer, not two days before bids are due.
Back to the Excess and Umbrella Insurance for Excavation Contractors hub. Related reading: How Excess Liability Stacks on Top of GL and Excess Coverage for Auto and Equipment Liability.
GET COVERAGE THAT ACTUALLY COVERS YOU.
Talk to someone who knows excavation risk, not just insurance forms.
No-pressure coverage review. We'll tell you straight if something doesn't fit.