Primary and Non-Contributory

Overview

Primary and Non-Contributory is an endorsement that establishes the order of payment when multiple insurance policies could apply to the same claim. It requires the endorsed policy to pay first (primary) and to pay in full without seeking contribution from the Additional Insured's own policies (non-contributory).

Why It Matters

Without this endorsement, when a claim involves both the vendor's policy and the property owner's policy, the two insurers might argue about who pays first and how much each contributes. This can result in delayed claim payments, coverage disputes, and the property owner's policy being impacted (which can increase premiums).

With a Primary and Non-Contributory endorsement, the issue is settled: the vendor's policy pays first and pays fully, up to its limits. The property owner's policy is only triggered if the claim exceeds the vendor's coverage.

How It Works in Practice

Consider this scenario:

1. A contractor's employee causes $800,000 in damage at a commercial building
2. The contractor has $1M General Liability with Primary and Non-Contributory endorsement naming the building owner
3. The building owner also has their own $1M General Liability policy

With Primary and Non-Contributory: The contractor's insurer pays the full $800,000. The building owner's policy is not touched.

Without Primary and Non-Contributory: Both insurers might argue that their policy should be "excess" over the other, or they might share the $800,000 on a pro-rata basis. The building owner's loss history is affected.

Where to Find It on a COI

Primary and Non-Contributory status is typically noted in the Description of Operations section of the ACORD 25. Look for language such as: "The General Liability policy is primary and non-contributory as required by written contract."

Some newer ACORD 25 form versions include a dedicated checkbox for this endorsement in the General Liability section.

Example

A large commercial landlord requires all service vendors to carry General Liability with Primary and Non-Contributory endorsement. When the HVAC contractor's technician accidentally floods a floor, the contractor's insurer handles the entire claim. The landlord's insurance program is completely unaffected, preserving their clean loss history and favorable premiums.