Contractor insurance learning center
Construction contracts often require a contractor’s insurance to apply on a primary and noncontributory basis for a project owner, general contractor, or another additional insured.
This wording concerns how applicable policies may respond when more than one insurance policy could potentially cover the same claim. It must be supported by the actual policy.
The simple explanation
When two or more insurance policies may potentially respond to the same claim, the policies contain provisions addressing how coverage is coordinated.
“Primary” generally means that the contractor’s applicable policy is intended to respond before certain other insurance available to the additional insured.
“Noncontributory” generally means that the contractor’s insurer will not seek contribution from certain other insurance maintained by the additional insured.
Breaking down the terms
Primary
Primary wording may require the contractor’s policy to respond to a covered claim before specified insurance available to the additional insured.
Noncontributory
Noncontributory wording may prevent the contractor’s insurer from seeking contribution from certain other insurance maintained by the additional insured.
Why contracts require it
A party requesting additional insured status may also want the contractor’s policy to respond before its own insurance.
An owner may require the contractor’s policy to respond first for qualifying liability arising from the contractor’s operations.
A general contractor may impose the requirement on subcontractors as part of its subcontract and risk-transfer program.
Commercial leases may require a tenant or contractor to provide additional insured and primary and noncontributory protection.
Municipalities and other public entities may require the wording for permits, projects, or work performed on public property.
Additional insured status
Contractors often see additional insured and primary and noncontributory requirements in the same contract. Although connected, they are not interchangeable.
Additional insured status may provide specified protection under the contractor’s policy. Primary and noncontributory wording addresses how that applicable protection interacts with certain other insurance available to the additional insured.
A party could qualify as an additional insured without automatically receiving primary and noncontributory treatment. The policy must separately support the requested priority and contribution wording.
Some policies include blanket primary and noncontributory wording for qualifying additional insureds when required by a written contract.
The contract may need to be executed before work begins or before a loss occurs. The additional insured must also qualify under the applicable additional insured endorsement.
Blanket wording does not mean the provision applies to every person or organization requesting a certificate. Every requirement in the endorsement must be satisfied.
Blanket endorsements
Scheduled endorsements
If blanket wording is unavailable or the requesting party does not qualify, the insurance company may need to issue a scheduled endorsement.
The carrier may request the contract, project details, relationship between the parties, operations, location, limits, or other underwriting information before approving the change.
Additional premium may apply, and the endorsement may not be available from every insurance company or under every policy.
Policies to review
Each policy contains its own other-insurance provisions and available endorsements.
This is the policy most commonly associated with additional insured and primary and noncontributory contract requirements.
Auto liability requirements must be reviewed separately. The general liability endorsement does not change the auto policy.
The umbrella’s treatment may depend on its own terms and the underlying policies. It should not be assumed to follow every requirement automatically.
Professional liability, pollution liability, property, and other policies may respond differently and require separate review.
Certificates of insurance
A certificate request may ask the agency to state that coverage is primary and noncontributory. The agency can only provide that confirmation when the actual policy supports it.
Typing the requested phrase into the certificate’s description box does not amend the policy. If the necessary endorsement is missing, a policy change may be required.
The requesting party may also ask for a copy of the supporting endorsement. The endorsement provides more reliable evidence of the actual terms than the certificate alone.
Read the certificate of insurance guidePrimary and noncontributory wording does not increase the policy limits or remove exclusions. It addresses how otherwise applicable insurance may interact with other coverage.
If the claim is outside the policy’s coverage, the priority wording does not create protection. The named insured’s operations, additional insured endorsement, allegations, exclusions, policy period, and limits remain important.
The requirement also does not necessarily mean that every policy maintained by the additional insured will never respond. Actual coordination depends on all applicable policies and the facts of the claim.
What the wording does not do
Before signing a contract
Contract requirements may exceed the protection included in the contractor’s current insurance program.
Determine which owners, general contractors, landlords, lenders, municipalities, or affiliated entities must receive protection.
Confirm whether the requirement applies while work is underway, after completion, or during both periods.
Determine whether the wording is requested under general liability, commercial auto, umbrella, or another policy.
Make sure the contractor carries the general liability, auto, employers liability, and umbrella limits required by the agreement.
Allow time for the agency and insurance company to review the contract and arrange any necessary endorsements.
Insurance professionals can explain policy options, but legal counsel should interpret indemnification and contractual obligations.
Related requirements
Submitting a request
Providing the complete written requirement allows the agency to compare it with the policies and determine whether existing wording applies or a policy change is needed.
Submit a certificate requestFrequently asked questions
Actual application depends on the policies, endorsements, additional insured status, written contract, allegations, and circumstances.
When supported by the policy, primary and noncontributory wording may require the contractor’s policy to respond before certain other insurance available to an additional insured and without seeking contribution from that insurance.
No. Additional insured status and primary and noncontributory treatment are separate issues. The policy must support both requirements.
No. A certificate may indicate that the wording applies when supported by the policy, but it cannot create or expand coverage.
Blanket wording may apply to qualifying additional insureds when required by a written contract. All endorsement conditions must be satisfied.
It may, depending on the policies and available endorsements. General liability wording does not automatically change the commercial auto or umbrella policies, so each must be reviewed.
No. It addresses priority and contribution between applicable policies. It does not increase limits, remove exclusions, or guarantee that a claim is covered.
It may. Cost and availability depend on the insurance company, policy, blanket or scheduled structure, project, operations, and parties involved.
Review contract requirements early
Send Ford Agency the complete insurance section of the contract. We can review whether your policies support the request or require additional endorsements.