Employer Life Insurance: Why It May Not Be Enough in 2026

September is Life Insurance Awareness Month, an annual campaign coordinated by Life Happens and LIMRA. August is a practical time to start the review before that conversation peaks nationally.

Is Employer-Provided Life Insurance Enough?

For most families, no. Employer-provided group life insurance is a useful starting benefit, but the coverage it provides is typically much more limited than employees assume.

According to LIMRA’s 2025 Insurance Barometer Study, 57 percent of individuals who carry only employer-provided life insurance believe they have enough coverage. In practice, the median employer-sponsored life insurance benefit in the United States is either a flat $20,000 or one times the employee’s annual salary. For a household with a mortgage, dependents, and ongoing financial obligations, that level of coverage addresses only a fraction of what the household would need to maintain financial stability after the loss of a wage earner.

LIMRA also found that approximately 48 percent of households surveyed said they would face financial hardship within six months if a primary wage earner passed away unexpectedly. That figure reflects how directly the employer coverage gap translates into real financial vulnerability.

Why Group Life Insurance Has Significant Limitations

Three specific limitations make employer group life insurance insufficient as a standalone coverage strategy for most families.

The coverage level is typically low. One times salary is the most common employer benefit. A financial planning guideline widely referenced by advisors suggests that adequate life insurance coverage is between five and ten times annual income, accounting for a mortgage, dependents, income replacement, and long-term goals. The gap between one times salary and seven to ten times salary is significant.

The coverage is not portable. Group life insurance through an employer exists only for as long as the employment relationship continues. When an employee changes jobs, is laid off, or retires, the employer-sponsored coverage typically ends. Converting group coverage to an individual policy at that point can involve limited options, higher premiums, and health underwriting that may create complications depending on the person’s health status at the time.

The coverage amount does not adjust with life circumstances. As a family grows, as a mortgage balance increases, and as financial obligations expand, the employer benefit typically stays flat. An individual life insurance policy can be purchased in an amount calibrated to the household’s actual needs and can remain in force regardless of employment changes.

How Much Life Insurance Do I Actually Need?

The right amount of life insurance depends on specific household circumstances. The most commonly referenced planning guideline suggests coverage of five to ten times annual income as a starting point. The actual calculation takes into account the outstanding mortgage balance, the number and age of dependents, the income contribution of each wage earner, and long-term goals such as college funding.

For a household earning $80,000 annually, one times salary provides $80,000 in coverage. A planning figure based on seven times income suggests $560,000 in coverage. The difference between those two figures is the practical gap that most employer group life benefit holders are carrying without knowing it.

Why Term Life Insurance Costs Less Than Most People Assume

According to LIMRA, approximately 40 percent of Americans overestimate the cost of a basic 20-year term life insurance policy. More than half of those estimates are based on a gut feeling or a wild guess rather than any actual research.

Term life insurance provides a death benefit for a defined period, typically 10, 20, or 30 years, at a fixed annual premium. For a healthy adult in their 30s or 40s, a $500,000 term policy is often significantly more affordable than most people expect before asking. Premium rates increase with age and can be affected by changes in health status, which is why reviewing coverage sooner rather than later tends to produce better outcomes.

Tooher-Ferraris offers life insurance tools and quotes to help families understand their options. Visit the life insurance tools page or request a life insurance quote to see what coverage looks like for your situation. For a complete overview of coverage options, visit the life insurance service page.

Frequently Asked Questions About Life Insurance

Frequently Asked Questions
How much life insurance do I need?	A commonly used starting point is 5 to 10 times annual income. The right amount also depends on mortgage balance, number and age of dependents, each earner’s income contribution, and long-term goals such as college funding. Working with an advisor produces a more accurate figure.
What is the difference between term and whole life insurance?	Term life insurance provides a death benefit for a defined period at a fixed premium. Whole life insurance provides a permanent death benefit with a cash value component. Term is typically the most affordable option for income replacement.
Is employer life insurance portable when I leave my job?	Employer group life insurance typically ends when employment ends. Some plans allow conversion to an individual policy, but options are often limited and premiums for converted coverage are typically higher than independently purchased term life insurance.
What does life insurance pay for?	Life insurance proceeds can be used for any purpose. Common uses include paying off a mortgage, replacing lost income, funding children’s education, covering final expenses, and settling outstanding debts.
When should I buy life insurance?	Premiums are lower when a person is younger and in good health. Purchasing coverage before health conditions develop is generally advantageous. Major life events such as marriage, the birth of a child, buying a home, or changing jobs are practical review triggers.

Ready to review whether your life insurance coverage is adequate for your family? The team at Tooher-Ferraris has been helping families protect what matters most since 1932. Contact us today or explore our life insurance tools to get started.

Business Insurance

August 4, 2026

Why Contractors Are Taking a Closer Look at Their Umbrella Limits in 2026

Most contractors establish their liability coverage limits when they first set up their insurance program and revisit them at renewal primarily as a cost exercise rather than a coverage adequacy review. That approach worked reasonably well when the liability environment was more stable. In 2026, more contractors are pausing to ask whether their current umbrella limits still reflect the projects they are pursuing and the legal climate they are operating in.

This is not an emergency situation. It is a routine program review conversation that has become more relevant as commercial liability claim severity has increased across industries over the past several years. Contractors who have not formally reviewed their umbrella program in two or three years are finding it a worthwhile exercise to confirm the coverage structure still aligns with their current risk profile.

What Has Changed in the Liability Environment

Commercial liability losses in the United States have been rising. According to Swiss Re, US commercial liability losses reached $143 billion in 2023, reflecting the combined impact of rising medical costs, increased litigation activity, and higher jury awards across multiple lines of business. Construction is among the industries most closely affected because construction work involves physical activity, multiple parties on shared job sites, and contractual relationships that can draw contractors into claims they did not initially anticipate.

According to Construction Executive’s 2026 industry outlook, excess and umbrella liability rates for construction accounts are projected to increase by as much as 15 percent in 2026. This pricing reflects how carriers are assessing the underlying exposure across the industry, and it is a practical signal that reviewing umbrella limits as part of the renewal conversation is time well spent.

It is worth noting that the commercial general liability market for construction remains largely stable and competitive. The umbrella layer is where the market has become more focused on underwriting discipline, and that is where most contractors benefit from taking a closer look.

What Umbrella Insurance Does for Contractors

Umbrella insurance provides an additional layer of liability protection above the limits of a contractor’s general liability, commercial auto, and workers’ compensation policies. When a claim exhausts the limits of one of those underlying policies, the umbrella steps in to cover the remaining loss up to the umbrella’s own limits.

For most contractors, the umbrella program is what determines how much financial exposure remains on the business side after insurance responds to a serious incident. A general liability policy with $1 million per occurrence coverage handles the large majority of routine claims. For a significant injury that involves extended medical treatment, lost wages, and extended legal fees, the umbrella is what provides coverage above the primary layer.

The umbrella also plays a practical role in contract qualification. Project owners and general contractors increasingly specify minimum umbrella limits as a condition of bid eligibility. A contractor whose umbrella limits fall below what a project requires may find themselves effectively disqualified from certain work, regardless of their qualifications or track record.

How to Think About the Right Limits for Your Operation

Determining appropriate umbrella limits is not a single formula that applies to every contractor. Several factors shape how an individual firm should calibrate their program.

The nature of the work is one consideration. Contractors performing work at heights, in confined spaces, or in environments with significant public exposure have different risk profiles than contractors working in controlled interior environments. The scale of projects matters as well. A contractor working on larger projects with more workers and more subcontractors on site has proportionally more complexity to manage and more opportunities for a significant incident to develop.

Contract requirements provide a practical starting point for establishing a floor. Reviewing the umbrella limits specified in current and anticipated contracts helps confirm whether the existing program meets the thresholds required to pursue the work the contractor wants to win. Many mid-size commercial projects now specify total liability coverage, including umbrella, in the range of $5 million to $10 million as a standard contract condition.

The annual renewal is the right moment to have this conversation. Reviewing the umbrella alongside the general liability and commercial auto policies as a single program gives a more complete picture than treating the umbrella as a fixed number that carries over automatically from year to year.

A commercial insurance program review that specifically addresses the umbrella layer is a practical step that most contractors can complete at their next renewal without significant disruption. For contractors who are also actively pursuing bonded work, discussing the umbrella program alongside the surety bond review gives a more complete picture of the overall risk transfer program.

Ready to confirm your umbrella coverage reflects your current operation? The team at Tooher-Ferraris has been helping contractors build appropriate insurance programs since 1932. Contact us today to schedule a no-obligation consultation.

Business Insurance

August 4, 2026

Builder’s Risk Insurance for Design-Build Projects: Why Standard Policies Leave Gaps Your Program Can’t Afford

Builder’s risk insurance is a standard component of most construction project programs, and the policy form that works well for a traditional design-bid-build project may benefit from review when the delivery method is design-build.

The distinction matters because design-build projects create exposures that standard builder’s risk forms were not written to address. Understanding where those considerations arise is useful for any design-build firm that wants to confirm its project insurance program is appropriately structured before work begins.

What Standard Builder’s Risk Covers

A standard builder’s risk policy covers the physical project under construction against direct physical loss or damage from covered causes, which typically include fire, wind, lightning, theft, vandalism, and accidental damage during the construction process. Coverage attaches when physical construction begins and terminates at project completion, occupancy, or policy expiration.

The policy insures the value of the work in place, including materials stored on site and, in many forms, materials in transit to the project. Most policies also include coverage for the cost of demolition and debris removal following a covered loss.

Standard builder’s risk was designed around a project delivery model in which the design is substantially complete before construction begins. The contractor builds from finalized plans, and the risk the builder’s risk policy addresses is primarily physical — what happens to the structure and materials while they are being assembled.

How Design-Build Changes the Coverage Equation

In a design-build delivery, the design and construction processes overlap. The design-build contractor begins performing design work before any physical construction starts, and design development continues in parallel with early construction phases on many projects. This creates a pre-construction design phase during which costs are accumulating and contractual commitments are being made, but no physical construction exists to trigger coverage under a standard builder’s risk form.

Standard builder’s risk policies also include professional liability exclusions, which remove coverage for losses arising from design errors, omissions, or professional negligence. In a traditional design-bid-build project, this exclusion does not create a significant gap for the contractor because the contractor is not responsible for the design. In a design-build project, where the contractor holds both the design and construction obligations, the professional liability exclusion in the builder’s risk form intersects with the contractor’s own professional liability exposure in ways that deserve careful attention.

According to the Design-Build Institute of America, design-build delivery now accounts for more than 44 percent of US construction volume across commercial, institutional, and infrastructure sectors. As design-build has grown as a delivery method, the insurance market has developed coverage options specifically structured for the design-build environment, including policy forms that address the pre-construction phase, modified delay in completion coverage, and more explicit treatment of professional liability exposure in the context of builder’s risk.

The question of who provides the builder’s risk policy on a design-build project, whether the project owner or the design-build contractor, is determined by the contract and should be confirmed before the project begins. The contract should clearly specify who is responsible for obtaining the policy, what coverage limits apply, who is named as an insured, and how the builder’s risk policy interacts with the separate professional liability coverage carried by the design-build contractor.

What to Review in Your Design-Build Builder’s Risk Program

A design-build firm reviewing its project insurance program should confirm several specific items.

Coverage for the pre-construction design phase should be addressed in the program structure, whether through a soft costs endorsement, a design-build specific policy form, or another mechanism. The interaction between the builder’s risk form and the firm’s professional liability policy should be reviewed to confirm that the professional liability exclusion in the builder’s risk form does not leave a gap for design-related losses.

Delay in completion coverage, which addresses the financial costs of project delays, should be reviewed specifically for how design-caused delays are treated. An exclusion for delays attributable to design errors can create gaps on design-build projects that would not exist on a traditionally delivered project of comparable scope and value.

Subcontractor coverage is another consideration. Whether subcontractor work is covered under the design-build contractor’s builder’s risk program, or whether subcontractors are required to obtain their own coverage for their scope, should be clearly addressed in both the policy and the contract with each subcontractor.

Reviewing specialty programs available to design-build contractors alongside the commercial insurance program is a practical starting point for confirming that the project insurance structure is appropriate for the delivery method your firm uses.

Ready to review your builder’s risk program for design-build work? The team at Tooher-Ferraris has been helping contractors and design-build firms structure appropriate project insurance programs since 1932. Contact us today to schedule a no-obligation consultation.

Personal Lines

August 4, 2026

Your Homeowners Policy Probably Does Not Cover Flood Damage. Here Is What to Know Before Storm Season Peaks.

August marks the beginning of the most active stretch of the Atlantic hurricane season. According to the National Hurricane Center, the peak of the season falls between mid-August and mid-October. This is a practical time for homeowners anywhere in the country to confirm exactly what their coverage includes for water damage caused by storms.

Does Homeowners Insurance Cover Flood Damage?

No. Standard homeowners insurance explicitly excludes flood damage. This exclusion applies universally, regardless of what causes the flooding, whether it is storm surge from a hurricane, overland flooding from a river, or rainwater that accumulates because a stormwater system is overwhelmed. It is not a fine-print technicality unique to certain carriers. It is a structural feature of how homeowners insurance works in the United States.

The reason for the exclusion is actuarial. Flood losses are geographically concentrated and can affect thousands of homes simultaneously in a single event, which creates a fundamentally different risk profile from the individual, unpredictable losses that homeowners insurance is priced to cover.

When Hurricane Helene brought catastrophic flooding to parts of North Carolina in late 2024, thousands of homeowners discovered that their policies did not cover the damage. The losses ran into the billions, and the majority were uninsured. That outcome follows a consistent pattern after nearly every major US flood event.

According to the Insurance Information Institute, only about 4 percent of US homeowners carry flood insurance. That figure is low even in areas near the coast or inside designated high-risk flood zones, and it is far lower in inland areas where flood exposure is less obvious.

What Is Flood Insurance and How Does It Work?

Flood insurance is a standalone policy that specifically covers losses caused by flooding. In the United States, it is available through two channels.

The National Flood Insurance Program is administered by FEMA and provides federally backed flood coverage to homeowners in participating communities. NFIP policies are sold through participating private insurance carriers and feature standard coverage limits and terms set by the federal program. NFIP coverage for a structure is capped at $250,000, and personal property coverage caps at $100,000 and must be purchased separately.

Private flood insurance is available from a growing number of carriers and can in some cases offer higher limits, broader terms, or different pricing than NFIP policies. According to industry data, private residential flood policies have been expanding at approximately 20 percent annually as more carriers enter the market.

A standard flood insurance policy covers structural damage to the home, including the foundation, electrical and plumbing systems, heating and cooling equipment, and built-in appliances. Personal property and contents coverage is a separate component. Flood policies do not cover outdoor property, vehicles, landscaping, or business interruption losses.

The most practical distinction to understand is this: homeowners insurance covers water damage that originates inside the home, such as a burst pipe. Flood insurance covers water that originates outside and enters the home at ground level. The source and entry point of the water determine which policy responds, which is why both types of coverage can be relevant after a single storm event.

Tooher-Ferraris offers flood insurance through both the NFIP and private market carriers. Homeowners can get a flood insurance quote or review coverage options directly through our website.

Who Needs Flood Insurance?

Homeowners in federally designated Special Flood Hazard Areas (high-risk flood zones labeled Zone A or Zone V on FEMA flood maps) are typically required by mortgage lenders to carry flood insurance. This requirement applies when the mortgage is federally backed.

The requirement represents a floor, not a ceiling. According to FEMA, more than 20 percent of all flood claims nationally come from properties located outside designated high-risk flood zones. Properties in moderate-risk zones, inland properties near rivers or low-lying areas, and properties in areas with aging stormwater infrastructure can all face meaningful flood exposure that the flood zone designation does not fully reflect.

A home insurance review that specifically examines flood exposure provides the information needed to make a considered decision. For a broader overview of personal coverage options, visit the personal insurance section of our website.

Real estate buyers and their agents are also increasingly navigating flood insurance questions earlier in the transaction process.

Our Insight on why buyers are asking insurance questions before making offers covers the flood zone disclosure conversation from the real estate professional’s perspective.

Frequently Asked Questions About Flood Insurance

Frequently Asked Questions
Does homeowners insurance cover flooding from a hurricane?	No. Standard homeowners insurance covers wind damage from a hurricane but excludes flooding. If a hurricane causes both wind damage and flood damage to the same property, two separate policies are needed to address both types of loss.
How long does flood insurance take to take effect?	NFIP policies typically have a 30-day waiting period before coverage becomes effective. Private flood insurance waiting periods vary by carrier. Coverage purchased after a named storm has formed generally does not take effect before that storm arrives.
Is flood insurance required if I live outside a flood zone?	It is not required by lenders for properties outside designated high-risk flood zones, but it may still be worth considering. More than 20 percent of flood claims come from properties outside those designated zones.
How much does flood insurance cost?	Cost depends on the property’s location, elevation, structure type, and the coverage amounts selected. The best way to determine cost for a specific property is to request a quote through Tooher-Ferraris.
Does flood insurance cover my car?	No. Flood damage to a vehicle is covered under the comprehensive component of an auto insurance policy, not under flood insurance. Flood insurance covers the structure and contents of the home.

Ready to review whether flood insurance belongs in your coverage program? The team at Tooher-Ferraris has been helping homeowners build complete protection programs since 1932. Contact us today or visit our flood insurance page to schedule a no-obligation consultation.

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Most Americans Are Underinsured for Life Insurance. The Employer Policy You Are Counting On May Not Be Enough.