The subcontract says our insurance must be “primary and noncontributory”. What does that take?

What do the two words mean?

The requirement is about the order in which two policies pay. When an owner or general contractor is an additional insured on your general liability policy, that party usually has a policy of its own as well. A claim against it could reach both.

“Primary” means your policy responds first. “Noncontributory” means that after your insurer pays, it does not turn to the other party’s insurer and ask it to share the bill. Contracts ask for both because the first word alone leaves the second question open. If two policies are both primary, the standard form shares the loss between them, by equal shares if every policy allows that and otherwise in proportion to limits.

The requirement only matters for a party that is an additional insured on your policy. It does not make anyone an additional insured, and it does not change your limits.

Which wording supplies each part?

What conditions does CG 20 01 attach?

The 04 13 edition of CG 20 01 is a single paragraph, and it applies only if two things are true.

• The additional insured is a Named Insured under the other insurance. If the other policy belongs to someone else, such as a parent company or a lender, read this condition against the facts.
• You agreed in writing, in a contract or agreement, that your insurance would be primary and would not seek contribution from other insurance available to the additional insured. A verbal instruction does not match that wording.
• The endorsement lists the coverage parts it modifies: the commercial general liability coverage part and the products/completed operations liability coverage part. Automobile, umbrella and excess policies are not on that list.
• Saxe Doernberger & Vita’s review of the December 2019 ISO filing reports that CG 20 01 was revised in that edition to extend to liquor liability coverage. Check which edition your policy carries.

Where do I look on my own policy?

• The forms schedule, for CG 20 01 and its edition date. Your insurer may use its own wording instead of the ISO form. Read what conditions it attaches.
• The Other Insurance condition in the coverage form, to confirm it has not been replaced by an endorsement that makes your policy excess.
• Your umbrella or excess policy, if the contract limit is met with it. Check whether the contract applies the requirement to every layer.
• The subcontract itself. The endorsement depends on a written agreement, so the contract must actually say “primary and noncontributory” for the party in question.

Related questions

Is “primary and noncontributory” the same as additional insured status?

No. Additional insured status makes the owner or general contractor an insured on your policy. Primary and noncontributory wording decides the order in which your policy and theirs pay. CG 20 01 only works for a party that is already an additional insured.

Can the agent put “primary and noncontributory” on the certificate without the endorsement?

The certificate does not change the policy. The ACORD 25 states that it does not amend, extend or alter the coverage. The statement on the certificate is only accurate if the policy wording supports it.

Does CG 20 01 apply to my umbrella policy?

Not by its own terms. The endorsement lists the general liability and products/completed operations coverage parts. An umbrella or excess policy has its own other-insurance wording, which has to be read separately.