Primary and noncontributory endorsement

A primary and noncontributory form is added to an insurance policy. It explains when the policy pays first and when the insurer won't ask another insurer to share the cost of a covered claim. There isn't one standard form that applies to every type of insurance. The form can vary depending on the policy and insurer.

Businesses searching for a primary and noncontributory endorsement sample may find example forms or policy wording online. Keep in mind, however, the actual endorsement attached to your policy is what controls your coverage. Insurer-specific endorsements can also use different form numbers or wording, so you shouldn't assume a particular form number is required because it appears in a contract or online example.

A CG 20 01 is an ISO commercial general liability endorsement. It addresses primary and noncontributory treatment under the policy's “Other Insurance” condition.

CG 20 01 and additional insured endorsements serve different purposes. An additional insured endorsement gives another party certain coverage under the policy. A CG 20 01 addresses how that coverage works in relation to the additional insured's own insurance.

A CG 20 01 endorsement doesn't add another party as an additional insured by itself. It only addresses which insurance responds first and whether the other insurer is asked to share the cost of a covered claim.

Businesses often encounter primary and noncontributory wording on certificates when reviewing a certificate of insurance (COI). However, the actual endorsement attached to the insurance policy determines whether primary and noncontributory coverage applies. A COI may note that the endorsement is included, but it generally doesn't change the policy or create coverage by itself. You should check the underlying policy to confirm the coverage.

Primary and noncontributory requirements can also apply to commercial auto liability insurance. A contract may include a primary noncontributory endorsement commercial auto requirement when a business uses vehicles while performing work for another company.

ISO offers commercial auto endorsements that address these requirements, including CA 04 49, which modifies the “Other Insurance” provisions of certain commercial auto coverage forms. It can require the business's auto liability coverage to respond first and prevents the insurer from asking the other party's insurer to share the cost.

For example, suppose a contractor uses a company vehicle while completing work for another business. The contract requires the contractor's auto liability insurance to be primary and noncontributory. If a covered accident occurs, the contractor's policy may be required to respond first instead of relying on the other business's auto insurance, depending on the contract and endorsement terms.

Keep in mind that additional insured status and primary and noncontributory status are separate requirements. A commercial auto contract may require one or both.

Understanding primary and noncontributory vs. waiver of subrogation can help business owners understand why a contract may require both. One doesn't automatically replace the other.

Primary and noncontributory status determines whose policy responds first and whether their insurer can ask the other party to share the cost of a covered claim. A waiver of subrogation limits an insurer's ability to recover money from a specified party after paying for a covered claim.

CG 24 04 is an endorsement associated with a waiver of transfer of rights of recovery against others. It's commonly referred to as a waiver of subrogation. It limits how much an insurer can recover from the person or organization listed in the endorsement after paying a covered claim.

CG 24 04 isn't a standard primary and noncontributory endorsement. Because the two provisions address different issues, a contract can require both.

Primary and noncontributory requirements can become more complicated when a business has multiple layers of insurance, like a liability policy and commercial umbrella insurance.

An umbrella policy generally provides coverage above the limits of an underlying liability policy. Because of that, businesses shouldn't assume a primary and noncontributory requirement automatically applies to the umbrella policy in the same way it applies to the underlying coverage. Small businesses with contractual umbrella requirements should confirm the required wording with an insurance professional.

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