The Primary and Noncontributory Endorsement: What It Means and Why It Matters

What Is Primary and Noncontributory Insurance? How a PNC Endorsement Sets Primary Coverage

Two insurance policies often respond to the same claim. A general contractor sued for property damage or bodily injury at a job site may have additional insured coverage on a subcontractor's commercial general liability (CGL) policy and its own general liability policy. Without other wording, the "other insurance" condition can split the loss through cost sharing, which leads to contribution disputes between multiple insurers.

The endorsement settles the order. "Primary" means the subcontractor's insurance policy responds first, up to its policy limits. "Noncontributory" means that the carrier will not seek contribution from insurance on which the additional insured is a named insured. The additional insured's own policy then acts more like excess insurance for that claim. That is the risk transfer the contract's insurance requirements are after.

Primary and noncontributory coverage does not create insurance coverage for an excluded claim or change the coverage scope, and it does not waive subrogation against a third party. A waiver of subrogation is a separate endorsement, even though contracts often ask for both, along with a hold harmless agreement and an indemnification clause.

If you would like the Downloadable Primary and Non-Contributory Endorsement PDF, click here.

How ISO CG 20 01 Handles Noncontributory Contract Requirements

ISO's standard form is CG 20 01, the Primary and Noncontributory, Other Insurance Condition endorsement (the current multistate edition is CG 20 01 12 19). This conditional wording applies only when the additional insured is a named insured on the other policy and the named insured agreed in a written contract that its coverage would be primary and would not seek contribution. Many carriers use their own policy endorsements or blanket wording instead, so read the endorsement language, not just the certificate of insurance.

Hypothetical example: A roofing subcontractor's contract with a general contractor requires PNC status. A worker from another trade is hurt and sues the general contractor. Because the roofer's CGL policy carries the endorsement and the contract was signed before the loss, the roofer's carrier first handles defense costs and the duty to indemnify, which simplifies claim handling. The agent's next step is to confirm the endorsement was issued, not just listed on the certificate.

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Frequently Asked Questions

What does primary and noncontributory mean? It means the named insured's policy pays first for a covered claim against the additional insured and will not ask the additional insured's own carrier to share. The order applies only to liability claims the policy covers, and only up to its coverage limits.

Is it the same as additional insured status? No. Additional insured status adds a party to the policy. The primary wording sets the order of payment for that party. Most contracts require both, and each needs its own endorsement or blanket provision.

What is primary and noncontributory wording on a certificate worth? By itself, very little. A certificate is informational and does not change the policy. For COI compliance, even with automated COI tracking, ask for the endorsement form and edition, or the blanket wording, before you confirm the requirement is met.

Does the endorsement apply to the umbrella policy? Not automatically. Umbrella policies have their own other insurance wording, and courts have reached different results. Check the umbrella form if the contract requires primary status above the first layer of liability insurance, to avoid coverage gaps.

How should agents answer clients who ask what is primary and noncontributory endorsement wording going to cost? The premium impact depends on the carrier. Some include it in blanket additional insured endorsements at no extra charge, while others add a charge. Quote it from the carrier's own rules, not from a past account.