Adam Mitchell, IBAO Young Broker of the Year 2019 Ontario Trucking Insurance is a network of RIBO-licensed insurance brokers specializing in commercial trucking. All content is written and reviewed by active industry professionals with direct underwriting experience. Expert review by Adam Mitchell, IBAO Young Broker of the Year 2019 (Mitch Insurance Brokers), edited by Paul Lemmon (All-Risks Insurance Brokers). Our editorial standards →
Ontario's $2M minimum liability coverage seemed adequate—until trucking lawsuits started routinely exceeding $5M, $10M, even $20M. These "nuclear verdicts" can destroy a trucking company overnight. Umbrella and excess liability insurance provides an additional layer of protection when your primary coverage runs out.
What Is Umbrella/Excess Liability Insurance?
Umbrella and excess liability insurance provide additional coverage limits above your primary policies. When a claim exceeds your auto liability, general liability, or employers' liability limits, umbrella coverage pays the excess—up to the umbrella limit.
Umbrella vs. Excess: What's the Difference?
- Excess Liability — "Follows form" coverage that extends your underlying policy. Only covers what your primary policy covers, with the same terms.
- Umbrella Liability — Broader coverage that may cover claims your underlying policies exclude. Provides its own terms and conditions.
- In Practice — For trucking, these terms are often used interchangeably. Most trucking umbrella policies function as excess coverage over auto and general liability.
The Nuclear Verdict Problem
Between 2010 and 2023, the average trucking jury verdict in the US increased by over 1,000%. Verdicts exceeding $10M are now common. Canada is following this trend. A $2M policy that seemed adequate 10 years ago may leave you personally exposed to millions in excess liability.
Why Do Trucking Companies Need Umbrella Coverage?
Nuclear Verdict Protection
Trucking jury awards regularly exceed $5M, $10M, even $20M+. Your $2M primary policy is just a starting point. Umbrella coverage protects your assets when claims exceed limits.
Shipper/Broker Requirements
Many major shippers now require $5M, $10M, or higher total liability limits. Without umbrella coverage, you can't access the best-paying freight contracts.
Cross-Border Operations
US litigation is especially aggressive. If you run cross-border, umbrella coverage is essentially required to protect against American lawsuit exposure.
Cost-Effective Protection
Umbrella coverage is surprisingly affordable compared to primary liability. Adding $1M in umbrella costs far less than increasing your primary from $2M to $3M.
How Much Does Umbrella Insurance Cost?
Umbrella/excess liability is priced per million dollars of coverage. Trucking operations typically pay $2,000 to $8,000 per year for each $1M of umbrella coverage, with rates decreasing per million as you buy more.
| Umbrella Limit | Approximate Annual Premium |
|---|---|
| $1 Million | $2,000 – $4,000 |
| $2 Million | $3,500 – $6,000 |
| $5 Million | $8,000 – $15,000 |
| $10 Million | $15,000 – $30,000 |
Factors Affecting Umbrella Rates:
Real Claim Examples
Nuclear verdicts are real—and umbrella coverage is what saves trucking companies from financial devastation:
Multi-Fatality Highway Accident
A commercial truck was involved in a catastrophic accident that killed two people and seriously injured three others. The initial lawsuit sought $8.5 million in damages. The trucking company had $2M primary liability but carried a $5M umbrella policy that covered the excess.
Hazmat Spill Environmental Claim
A tanker truck overturned on a rural highway, spilling diesel fuel that contaminated a nearby stream and groundwater. Environmental cleanup costs reached $1.8M, and affected property owners sued for an additional $2.5M in damages. Primary liability was $2M.
Pedestrian Accident with Permanent Injury
A delivery truck struck a pedestrian in downtown Toronto, causing permanent spinal cord injury. The victim, a 32-year-old professional, sued for lost lifetime earnings, medical care, and pain and suffering. The verdict came in at $4.2 million.
Multi-Vehicle Pileup in Fog
A fleet truck failed to stop in dense fog on Highway 400, triggering a 12-vehicle pileup. Seven people were hospitalized with serious injuries, and three vehicles were totaled. Combined claims from multiple parties exceeded $5.5 million. The company's $2M primary was exhausted immediately.
Tips for Umbrella Coverage
Buy Enough Coverage
For most trucking operations, $5M total liability ($2M primary + $3M umbrella) is a reasonable minimum. Cross-border or high-value operations should consider $10M+.
Ensure Underlying Coverage Matches
Umbrella policies have "underlying requirements"—minimums your primary policies must meet. Make sure your auto and general liability meet these requirements to avoid gaps.
Buy from the Same Insurer
When possible, get your umbrella from the same carrier as your primary auto policy. This eliminates disputes about which policy applies and streamlines claims.
Review Annually
Verdict trends keep rising. What was adequate coverage 5 years ago may be insufficient today. Review your umbrella limits annually and increase as your business grows.
Understand Exclusions
Umbrella policies have exclusions—pollution, certain cargo types, punitive damages in some jurisdictions. Know what's not covered so you can plan accordingly.
Get Your Umbrella/Excess Liability Insurance Quote
Free quotes from licensed Ontario brokers
Frequently Asked Questions
How does umbrella coverage work with my auto liability?
When an auto liability claim exceeds your primary limit (e.g., $2M), the umbrella policy kicks in to pay the excess. If you have $2M primary and $3M umbrella, your total coverage is $5M. The umbrella only pays after the primary is exhausted.
Does umbrella cover cargo claims?
Generally no. Umbrella policies typically cover liability (injury and property damage to others), not first-party coverage like cargo insurance. Cargo is a separate policy. However, some umbrella policies extend to cargo liability—check your specific policy.
Can I get umbrella coverage as an owner-operator?
Yes, but it's less common for single-truck operations. Most umbrella policies require minimum fleet sizes or premium thresholds. Work with a specialized trucking broker to find carriers that write single-truck umbrella coverage.
What's the difference between occurrence and claims-made umbrella?
Occurrence policies cover incidents that happen during the policy period, regardless of when the claim is filed. Claims-made policies cover claims filed during the policy period. For trucking, occurrence policies are standard and preferred—they provide longer-term protection.
Should I increase my primary limits or buy umbrella?
Generally, umbrella is more cost-effective for adding coverage. Increasing from $2M to $5M primary is more expensive than buying $3M umbrella over $2M primary. Umbrella gives you more coverage per dollar spent.