What Is Primary And Noncontributory

Primary and noncontributory is a coverage condition that determines which insurer pays first - and how much - when a claim involves both the named insured's policy and the additional insured's own insurance. Without primary-and-noncontributory status, both policies share the loss proportionally. With it, the named insured's policy responds entirely first before the additional insured's own coverage is called upon. The distinction determines who absorbs the financial exposure when a loss involves a contractor and the party that hired them.

Key Takeaways

• Standard additional insured coverage shares losses between the named insured's policy and the additional insured's own policy using the other insurance clause.
• Primary and noncontributory (P&NC) changes that structure: the named insured's policy responds first and entirely, with the AI's policy acting only as excess.
• The endorsement that creates P&NC status is ISO CG 20 01 (Primary and Non-contributory - Other Insurance Condition). The policy must have this endorsement, not just the certificate.
• Noting "primary and non-contributory" in the ACORD 25 Description of Operations does not create P&NC status if the CG 20 01 is not on the policy.
• P&NC is required in most commercial construction master agreements, large commercial leases, and vendor agreements with major retailers and municipalities.

How Standard Additional Insured Coverage Works

When a named insured's GL policy names a project owner as additional insured under CG 20 10 or CG 20 37, the additional insured gains coverage rights for claims arising from the named insured's operations. If a third party sues the project owner and the claim arises from the contractor's work, the project owner can tender the claim to the contractor's GL policy.

Under standard additional insured status, however, the contractor's GL policy and the project owner's own GL policy both apply to the same loss. Both policies contain an "other insurance" clause that instructs each carrier to share the loss with other applicable insurance. The result: the contractor's insurer pays its proportional share and the project owner's insurer pays the rest.

This is the problem P&NC solves. A project owner or construction lender should not have their own GL policy depleted by a contractor's negligence. The contractor caused the loss. The contractor's insurance should pay it entirely.

What Primary and Noncontributory Changes

When P&NC is in place, the named insured's policy (the contractor's) responds first and in full before the additional insured's own coverage is accessed. The additional insured's own policy is excess - it responds only if the loss exceeds the contractor's limits or covers claims excluded from the contractor's policy.

The practical effect: if a contractor's employee injures a subcontractor on a project and the project owner is sued as an additional insured, the contractor's GL responds to defend the project owner and pay the judgment. The project owner's GL policy does not contribute unless the loss exceeds the contractor's limits.

This protects the project owner's loss experience, preserves their policy limits, and keeps the financial responsibility with the party whose operations caused the loss.

The Endorsement That Creates Primary and Noncontributory Status

ISO CG 20 01

ISO endorsement CG 20 01 is the standard form that creates primary-and-noncontributory status. Its full title is "Primary and Non-contributory - Other Insurance Condition." The endorsement amends the other insurance condition in the GL policy to read that coverage is primary and will not seek contribution from any other insurance available to the additional insured.

The current edition is CG 20 01 04 13. Prior editions include CG 20 01 12 04 and CG 20 01 04 05. The differences between editions are relatively minor, but some master contracts specify a particular edition by date. Agencies should verify which edition is on the policy when a contract specifies a particular form.

Carrier-Drafted Equivalents

Not all carriers use ISO forms. Many carriers write their own P&NC endorsement language that achieves the same effect. These endorsements are acceptable when the contract language requires only "primary and non-contributory" coverage rather than specifically "CG 20 01." When a contract requires the ISO form by number and the policy has a carrier equivalent, the agency should confirm the contract counterparty will accept the substitute form.

When P&NC Must Be Paired With Additional Insured Status

P&NC is a modification to how additional insured coverage responds - it does not independently extend coverage. The policy must first add the additional insured under a CG 20 10, CG 20 37, or equivalent endorsement. Then the CG 20 01 modifies how that coverage interacts with the additional insured's own insurance. A certificate that shows P&NC without confirming the additional insured endorsement is also on the policy is incomplete.

How P&NC Appears on the ACORD 25

The certificate of insurance (ACORD 25) reflects P&NC status primarily in the Description of Operations field. A properly documented certificate will include language such as:

"The General Liability policy includes ISO endorsement CG 20 01 making coverage primary and non-contributory with respect to [Certificate Holder Name]."

The additional insured checkbox in Box 10 of the ACORD 25 should also be marked. But checking that box alone - without the Description of Operations notation and without the CG 20 01 endorsement on the policy - does not create P&NC status.

The most common error: an agency marks the AI box and adds "Primary and Non-Contributory" in the Description of Operations field, but the policy does not have CG 20 01. The certificate representation is false. If a claim occurs, the contractor's insurer applies the standard other insurance clause and refuses to accept sole primary responsibility for the loss. The additional insured's insurer is pulled in to share the claim, and the additional insured is left in breach of the contract that required P&NC.

Why P&NC Is Required

Construction Owners and Lenders

Project owners invest capital and bear legal exposure on construction projects. When a contractor's employee causes a third-party injury on the project, the project owner is often co-defendant because they control the site. P&NC verifies that the contractor's policy - not the owner's - responds to that joint liability. Construction lenders take the same position: they require P&NC in their loan covenants because they do not want borrower claims contaminating the insurance coverage they rely on as collateral protection.

Commercial Leases

Commercial landlords require tenants to name them as additional insured on a primary and non-contributory basis. If a tenant's customer slips and falls on the leased premises and sues the landlord, the landlord wants the tenant's GL to respond first. Without P&NC, the landlord's GL policy and the tenant's GL policy share the claim. With P&NC, the tenant's policy responds first and the landlord's policy is protected.

Major Retailers and Municipalities

Large retail chains with vendor programs - including grocery chains, big-box retailers, and department stores - universally require P&NC from every vendor and service provider. Government contracts, including federal, state, and municipal contracts, almost always include P&NC language. These entities have large GL programs that they manage carefully, and they do not want individual vendor claims affecting their loss experience.

Verifying P&NC in Your Workflow

The certificate alone is not sufficient verification. When a contract requires primary and non-contributory coverage, follow these steps:

1. Read the contract. Identify whether P&NC is required and whether a specific endorsement form is named.
2. Pull the policy endorsements. Confirm CG 20 01 (or an acceptable equivalent) is attached to the GL policy. Note the edition date if the contract specifies one.
3. Confirm AI endorsements are also present. P&NC requires both the AI endorsement (CG 20 10, CG 20 37, or equivalent) and the CG 20 01. Verify both.
4. Issue the certificate accurately. Mark the AI box and include specific P&NC language in the Description of Operations field citing the endorsement form.
5. Document the policy review. Store the endorsement confirmation in the file with the date reviewed.

If the policy does not have CG 20 01, do not issue the certificate representing P&NC status. Escalate to the account manager. Adding CG 20 01 mid-term is a routine endorsement that most carriers process within 48 hours. The E&O exposure from issuing an inaccurate P&NC representation far outweighs the administrative friction of requesting the endorsement first.

For a deeper look at waiver-of-subrogation - the other endorsement requirement frequently paired with P&NC in construction and vendor contracts - see post #201 and post #203.

BrokerageAudit's COI Manager checks whether CG 20 01 is confirmed on the policy before populating the Description of Operations field with P&NC language. Agencies using the platform do not issue P&NC representations on certificates without endorsement confirmation in the system.

P&NC vs. Standard AI Coverage: Summary

Frequently Asked Questions

What is primary and noncontributory in simple terms?

Primary and noncontributory means the contractor's insurance pays for a covered claim first and entirely, without asking the project owner's or additional insured's own insurance to share the cost. Without P&NC, both insurers split the loss. With P&NC, the contractor's policy handles the claim, and the additional insured's own policy only comes into play if the claim exceeds the contractor's limits.

What endorsement creates primary and noncontributory status?

ISO endorsement CG 20 01 (Primary and Non-contributory - Other Insurance Condition) is the standard form. The current edition is CG 20 01 04 13. Carrier-drafted equivalents exist and are acceptable in most contracts. The endorsement must be on the policy - it cannot be created by certificate language alone.

Can I note "primary and non-contributory" on an ACORD 25 without the endorsement?

You can type it on the certificate, but it does not create the coverage and it misrepresents the policy. When a claim occurs and the contractor's insurer invokes the standard other insurance clause, the additional insured's insurer is pulled in regardless of what the certificate says. The issuing agency faces E&O exposure for the misrepresentation. Only issue P&NC representations when the CG 20 01 endorsement is confirmed on the policy.

Does primary and noncontributory apply to all lines or just GL?

CG 20 01 applies specifically to the commercial general liability policy. Other lines - auto, WC, umbrella - have their own coverage priority rules. Contracts that require P&NC typically mean the GL policy unless they specifically extend the requirement to other lines. Umbrella policies follow form from the GL, so a P&NC GL may extend through to the umbrella depending on the umbrella's language.

How does primary and noncontributory interact with waiver of subrogation?

They are separate requirements that address different issues. P&NC determines which policy pays first when a covered claim occurs. Waiver of subrogation prevents the paying insurer from recovering against other parties after the claim is paid. Construction and vendor contracts typically require both. P&NC is created by CG 20 01 on the GL policy. Waiver of subrogation on WC is created by endorsement WC 00 03 13. Both must be on the underlying policies - not just represented on the certificate.

Why would a contractor's insurer agree to primary and noncontributory status?

Carriers offer P&NC coverage because it is a defined and priceable risk. A P&NC endorsement typically adds 3% to 10% to the GL premium because it expands the carrier's exposure - they agree to respond first without contribution from other insurance. Carriers underwrite this based on the insured's operations, the number of additional insureds, and the contract types. For contractors with many AI relationships, a blanket P&NC endorsement is often more economical than scheduling P&NC for each project individually.

Written by Javier Sanz, Founder of BrokerageAudit. Last updated April 2026.

Issuing a certificate that represents primary and noncontributory status without confirming CG 20 01 is on the policy is one of the most common sources of construction E&O claims. BrokerageAudit's COI Manager verifies endorsement presence before certificate issuance and blocks P&NC representations that lack policy backing. Explore COI Manager