Mike runs a roofing company in Everett with twenty-five employees, splitting its work between residential reroofs and commercial flat roofs. A property management company that owns several warehouses in Snohomish County invited him to bid on a large recoating contract.
The contract required $5 million of excess liability. Mike had $1 million of general liability and nothing above it.
What he asked for
A $5 million commercial umbrella.
What the review found
Roofing is one of the harder trades to insure. Umbrella carriers look closely at the policies underneath, and several things would have stopped this umbrella from working as intended.
No stop-gap employers liability. Mike's crew was covered by L&I, but he had no stop-gap. Most umbrella carriers require employers liability as an underlying policy. For roofers, where serious falls happen and third-party lawsuits follow, an umbrella without stop-gap underneath can leave the biggest risk unprotected.
The general liability had a height restriction. His general liability form limited coverage for work above three stories, a restriction some carriers use for roofers. Several of the warehouse roofs exceeded it.
Residential exclusion confusion. The current carrier had a separate endorsement limiting residential work. Mike's mix of residential and commercial jobs meant the policy did not quite fit either.
Subcontractor certificates were not being collected. Mike used subs for sheet metal and gutters. Several did not carry insurance, and his carrier would charge those costs back at audit.
What we put in place
We moved his general liability to a carrier that writes roofers without height restrictions, covering both residential and commercial work, with blanket additional insured and waiver of subrogation endorsements for commercial clients.
We added stop-gap employers liability at $1 million, the standard umbrella requirement.
With the underlying policies in order, we placed a $5 million umbrella over the general liability, commercial auto, and stop-gap. The umbrella carrier confirmed the schedule of underlying policies in writing, which matters: an umbrella with a mismatch underneath can leave a gap exactly where the primary limit runs out.
We set up a simple process for subcontractor certificates, and required every sub to name Mike as an additional insured.
Why it mattered
Mike won the recoating contract. Midway through, a sub's worker slipped on a wet membrane and fell through a skylight opening, and later sued Mike's company as the contractor in control of the site. Because stop-gap and the umbrella were structured correctly, the claim had a defense and a limit behind it, and the sub's own coverage responded first.
If you run a roofing company
- Make sure stop-gap is in place under your umbrella in Washington
- Check your general liability for height and residential restrictions
- Get the umbrella's schedule of underlying policies in writing
- Collect certificates from every subcontractor before they start
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