i don't have a great way of answering the question. Ideally one could look at some data to help understand the relative likeliness of awards of various sizes. Then you could determine how much you are willing to pay to mitigate the various risks. WHen I looked into doing that, I didn't find much in the way of data.
Of course the insurance companies have this data, and you can impute an upper bound for their take on your risk based on the price of their policies. One odd thing I found is that the cost per million of coverage gets lower at first as you add more coverage but then gets much higher. In my investigations, 10MM of coverage was much more than twice the price of 5MM. Yet 5MM was less than twice the price of 2.5MM. I suspect they are worried about informaition assymetries for people who are trying to buy that much coverage.
Another approach would be to try to size the risks you think you realistically face in your own world. Obviously this is an art not a science since we don't have crystal balls, but we do know some things about our lives that can help. I don't have a swimming pool, or a trampoline, or a dangerous dog, or a handgun, etc. But I do have a car, and I do have a kid, and someday I'll have a kid with a car. Killing or disabling a breadwinner is probably one of the biggest risks that I'm regularly exposed to. Given the typical salaries in this high cost of living area, such a tragedy would almost certainly consume a one or two million dollar policy with plenty of claim to go.
So, repeating what I said before, I don't have a great answer. I will say that I'm more comfortable with a $5MM policy than I would be with 1 or 2. Like your mileage, your risk tolerance may vary.