What is Primary & Non-Contributory on a Certificate of Insurance?

When providing a Certificate of Insurance to a client, vendor, or general contractor, you may be asked to include primary and non-contributory language.

Here is the technical definition of Primary and Non-Contributory as it related to an “Additional Insured” on your general liability policy:

Primary & Non-Contributory language on a certificate of insurance means that your policy must pay before other applicable policies (primary) and without seeking contribution from other policies that also claim to be primary (noncontributory).

Still unsure what this means or the rights you’re giving away by adding this language to your policy?

Watch this short video or keep reading to learn more…

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What is Primary & Non-Contributory?

Primary & Non-Contributory (also known as PNC) language is an endorsement added to your general liability insurance policy which grants certain additional rights to a third party requesting “Additional Insured” status on your policy.

This is a form of contractual risk transfer providing broader protections to another party (your client) in the event of a liability claim.

Primary and noncontributory endorsements are common practice in commercial general liability insurance defining the insurance relationship between general contractors and subcontractors, property owners and general contractors, landlords, and their tenants.

You may also be asked to provide PNC language on commercial auto policies and worker’s compensation depending on the state you’re working in.

Adding Primary & Non-Contributory language to your general liability policy should not be taken lightly.

To make this concept more straight-forward we’ll break each part down separately:

Primary

Primary refers to the priority in which coverage will respond in the event of a claim.

In the case of a client requiring you to include primary and non-contributory language as part of an additional insured agreement, your client is requiring your insurance to be primary (respond first) before their own policy.

Non-Contributory

Non-contributory means your insurance will not seek contribution (try recoup damages) from your client’s insurance in the event of a claim.

For instance, if there was a claim and both you and your client were liable, then the injured party would have the right to recover damages from both you and your client’s insurance. This is the standard “Contributory” relationship that exists as a default.

However, in the same situation, with primary and non-contributory language in place, your insurance company will not seek contribution from your client’s insurance policy.

Your insurance policy takes the full brunt of the claim (and the ramifications in terms of insurance premium increases).

The Rub

Adding Primary and Non-contributory language broadens the protections for your client and puts more responsibility on you and your insurance carrier.

The potential ramifications of the Primary & Non-Contributory endorsement make tracking Certificates of Insurance extremely important.

Do you have a documented COI process and tracking system?

It’s OK if you answered “No.” Most businesses do not. This is where Rogue Risk can help…

We believe it our job as insurance agents to do more than just place your insurance.

Our RogueRisk365 program, (and easy-to-use software platform) helps you establish a system for requesting certificates of insurance, ensuring proper language and endorsements, as well as tracking COIs that have been both sent to clients and received from sub-contractors.

Certificates of Insurance don’t have to be hassle.

Reach out today and explain exactly how our process works. Find an option below that best suits how you like to communicate:

I look forward to introducing you to a new way of viewing your insurance program.

Thank you,

Ryan Hanley

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