Primary and Non-Contributory Insurance Explained

Primary and non-contributory is contract language that tells two insurers how to split a claim. "Primary" means your policy pays first. "Non-contributory" means your policy won't ask the other party's insurer to chip in. Together, they make your general liability insurance responsible for a covered loss arising from your work, before the client's own insurance is touched.

Clients ask for it because, without it, their own insurer could end up sharing a loss your work caused, which hits their loss history and their premiums. You provide it through an endorsement, most commonly ISO CG 20 01. Like additional insured status, it has to be in the policy, not just on the certificate.

Start with the "Other Insurance" clause

Every liability policy has an Other Insurance condition. It tells the insurer what to do when another policy also covers the same loss. There are three basic types:

Type	What it says	Effect when two policies overlap
Primary	This policy pays first, up to its limits	Responds before excess policies
Excess	This policy pays only after other insurance is exhausted	Waits for the primary policy to pay out
Pro rata / contribution	This policy shares the loss with other primary insurance	Each insurer pays a share

Under the standard ISO commercial general liability form, the policy is generally primary. But it becomes excess in certain situations, including when you have been added as an additional insured on someone else's primary policy for the same premises, operations or completed work. When two policies are both primary, the standard form shares the loss by equal shares if the other policy allows it, otherwise by limits (each insurer pays in proportion to its limit).

That's where the problem starts for a property owner or general contractor. Suppose a GC is an additional insured on a subcontractor's CGL and also has its own CGL. When the sub's work causes an injury, both policies may respond. Without primary and non-contributory wording, the two insurers may argue about who pays first, and the GC's insurer may end up contributing to a loss the sub's work caused.

What "primary" means

Primary means your policy responds first, before any other insurance available to the additional insured. The additional insured doesn't have to tender to its own carrier and wait.

What "non-contributory" means

Non-contributory means your insurer won't seek contribution from the additional insured's own insurance. Your insurer can't pay the claim and then demand a share from the client's insurer.

"Primary" alone isn't always enough. A policy can be primary but still share the loss with another primary policy under a contribution clause. "Non-contributory" closes that gap.

Together: why clients require both

Without the endorsement	With primary and non-contributory
Client's insurer may have to share the loss	Your policy responds first and alone, up to its limits
Client may tender to its own carrier and file a claim	Client's own policy is typically untouched
Insurers may dispute who pays first	Order of payment is set in your policy
Client's loss history and premium may take the hit	The loss stays on your policy

For the client, the goal is simple. If your work causes the loss, your insurance pays, and theirs stays clean.

The endorsement: ISO CG 20 01

The standard ISO form is CG 20 01, Primary and Noncontributory – Other Insurance Condition. The 04 13 edition modifies the Commercial General Liability Coverage Part and the Products/Completed Operations Liability Coverage Part. It adds this to the Other Insurance condition, "and supersedes any provision to the contrary":

This insurance is primary to and will not seek contribution from any other insurance available to an additional insured under your policy provided that:

(1) The additional insured is a Named Insured under such other insurance; and

(2) You have agreed in writing in a contract or agreement that this insurance would be primary and would not seek contribution from any other insurance available to the additional insured.

The 12 19 edition extends the endorsement to the Liquor Liability Coverage Part as well.

Three practical points from that wording:

1. It only applies to additional insureds. CG 20 01 works alongside an additional insured endorsement such as CG 20 10 or CG 20 37. It doesn't make your policy primary for someone who isn't an additional insured.

2. It requires a written agreement. Your contract has to say your insurance will be primary and non-contributory. If the contract is silent, the endorsement may not apply even if you have it.

3. It applies to the additional insured's own policies. The non-contributory promise covers insurance where the additional insured is a Named Insured. If the client is merely an additional insured on some third party's policy, CG 20 01 doesn't speak to that.

Many carriers use their own primary/non-contributory wording, either built into a blanket additional insured endorsement or as a separate form. That's fine if it does the same job. Read it against your contract.

Not sure your policy is primary and non-contributory where your contracts require it? TSM is an independent agency — we compare carriers for you. Call (209) 524-6366 (Modesto) or (530) 221-3031 (Redding).

What the contract language usually looks like

You'll see primary and non-contributory requirements in construction subcontracts, commercial leases, vendor agreements and event permits. Typical wording:

"Contractor's insurance shall be primary and non-contributory with respect to any insurance or self-insurance maintained by Owner, its officers, agents and employees. Any insurance maintained by Owner shall be excess of Contractor's insurance and shall not contribute with it."

Or, more briefly, inside the additional insured requirement:

"Owner shall be named as additional insured on Contractor's commercial general liability policy for ongoing and completed operations, on a primary and non-contributory basis."

Things to watch for in the contract:

• "All policies" requirements. Some contracts require primary and non-contributory status on auto and umbrella too, not just GL. Your umbrella needs to sit over your primary policies and also be primary to the client's own umbrella or excess. Not every umbrella does that by default. See commercial umbrella vs excess liability.

• "Self-insurance" language. Many public entities and large companies self-insure. The wording often says your coverage is primary to their "insurance or self-insurance." Check that your carrier's endorsement addresses that if the contract requires it.

• "Regardless of fault" language. Primary and non-contributory sets the order of payment for covered claims. It doesn't expand what's covered. If the additional insured endorsement only covers injury caused in whole or in part by your work, primary status doesn't change that.

• Lists of parties. If the contract requires primary status for the owner, GC, architect and lender, each one needs to qualify as an additional insured first.

How it appears on a certificate of insurance

The ACORD 25 has no checkbox for primary and non-contributory. It normally appears in the Description of Operations box, often like: "Additional insured status applies to [Owner] on a primary and non-contributory basis per written contract, CG 20 10, CG 20 37, CG 20 01." The certificate is still only a summary. The ACORD 25 says it "does not affirmatively or negatively amend, extend or alter the coverage afforded by the policies," and California Insurance Code §384 requires certificates to carry similar wording.

If you're receiving the certificate, ask for the endorsement. Our certificate of insurance request template includes that request, and our guide on how to read a certificate of insurance shows where to find it.

Primary and non-contributory vs waiver of subrogation

These two are almost always requested together, and people mix them up.

	Primary and non-contributory	Waiver of subrogation
Question it answers	Whose insurance pays first, and does the other one share?	After paying, can your insurer sue the client to recover?
Who benefits	The additional insured's own insurer and loss history	The party named in the waiver
Typical ISO form	CG 20 01	CG 24 04 (GL), CA 04 44 (auto), California workers' comp waiver endorsement
Requires a written contract?	Yes	Yes, signed before the loss

Both protect the client from absorbing a loss your work caused. One controls the order of payment; the other blocks recovery afterward. See waiver of subrogation explained.

Who typically asks for it

• General contractors and project owners, in nearly every subcontract. This is standard in contractors insurance

• Commercial landlords and property managers, in leases and vendor agreements. See real estate and property management

• Cities, counties, school districts and special districts, in permits and service contracts.

• Large retailers, hospitals and corporate customers, in vendor onboarding.

Before you sign: a short checklist

4. Find the insurance section and note every place it says "primary," "non-contributory," "excess" or "contribute."

5. Check which policies it applies to: GL only, or auto and umbrella too.

6. Confirm the additional insured requirement is also met. CG 20 01 doesn't work without it.

7. Send it to your agent to confirm your policy has CG 20 01 or equivalent, ideally on a blanket basis if you sign many contracts.

8. Ask for a corrected certificate that matches the contract wording, and send the endorsement copies with it.

For a broader look at what your GL policy covers before endorsements, see general liability insurance for businesses.

FAQs

What does primary and non-contributory mean on a certificate of insurance?

It means the policyholder's insurance will pay first for covered claims involving the additional insured, and won't seek a share from the additional insured's own insurance. The certificate only reports it; the actual promise comes from an endorsement such as CG 20 01.

What is the CG 20 01 endorsement?

ISO's Primary and Noncontributory – Other Insurance Condition endorsement. It makes the CGL policy primary and non-contributory for an additional insured when the named insured has agreed to that in a written contract, and the additional insured is a Named Insured on the other insurance.

Do I need primary and non-contributory if I'm already an additional insured?

Usually, yes. Additional insured status gives you rights under the policy, but without primary and non-contributory wording, the other-insurance clauses may make your own insurer share the loss.

Does primary and non-contributory cost extra?

It depends on the carrier. Many contractor packages include it in a blanket endorsement. Others add it for a small charge or include it with the additional insured endorsement.

Does primary and non-contributory apply to my umbrella policy?

Not automatically. If your contract requires it on umbrella or excess policies, confirm your umbrella carrier will provide it.