How much umbrella liability does a medical device company need?

The right umbrella limit for a device manufacturer is set by two things: the severity of the device and the combined limits its hospital, GPO, and distribution contracts require. A smaller, lower-risk manufacturer often starts with a $5M umbrella over its primary general and products liability, while implantable, life-sustaining, or hospital-facing device makers commonly carry $10M or more and scale from there.

What the umbrella sits over matters. A standard umbrella follows over general liability, products and completed operations, and auto, but it generally does not extend over professional or errors and omissions, directors and officers, or cyber unless specifically written to follow form. A device maker that assumes its umbrella tops up its tech E&O or cyber tower is usually mistaken.

Because hospital and GPO contracts frequently specify a required combined limit, the umbrella is bought to the largest contract requirement and the device's severity rather than to a formula tied to revenue. It sits above an adequately-sized primary products limit, not as a substitute for one.