CG 20 01: Primary and Noncontributory, Other Insurance Condition

What primary and noncontributory means on a CGL policy

Every CGL policy has an Other Insurance condition that decides how it shares a loss with other policies covering the same insured. Without an endorsement, the subcontractor's policy and the general contractor's own policy can end up sharing defense and indemnity, by equal shares or by limits, and the general contractor's deductible or self-insured retention absorbs part of a claim the subcontractor's insurance was supposed to carry.

CG 20 01 changes that. It makes the subcontractor's insurance primary to, and not entitled to contribution from, other insurance available to the additional insured, provided two conditions are met: the additional insured is a Named Insured under that other insurance, and the subcontractor agreed in writing in a contract or agreement that its insurance would be primary and would not seek contribution.

Primary means first in line. Noncontributory means the subcontractor's carrier will not ask your carrier to share. You need both for the arrangement contracts intend: the subcontractor's policy defends and pays up to its limits before your program is touched.

How CG 20 01 affects a tender

When you tender to a subcontractor's carrier as an additional insured, the carrier first asks whether you are covered at all, which is the job of the additional insured endorsement. Its second question is how it shares with your own insurance. Without a primary and noncontributory endorsement, the carrier may accept the tender but offer to split defense costs with your insurer, or ask your carrier to contribute to the settlement.

For a general contractor carrying a retention, that contribution comes straight out of the retention. The typical GL self-insured retention for mid-market general contractors ($25M to $100M revenue) runs $50,000 to $250,000 (Commercial Casualty Actuarial Study), so a contribution demand on a mid-size injury claim is real money.

A missing or failed primary and noncontributory endorsement does not usually defeat the tender. It changes who pays and how much of your own retention is consumed, which is why it sits on nearly every construction and commercial lease insurance exhibit.

CG 20 01 edition comparison: 04 13 and 12 19

Before 2013, primary and noncontributory status came from carrier endorsements or from language inside additional insured forms, and the wording varied widely. ISO introduced CG 20 01 04 13 to standardize it for the Commercial General Liability and Products/Completed Operations coverage parts.

The 12 19 edition keeps the two-condition structure and adds the Liquor Liability Coverage Part, supporting the liquor liability additional insured endorsements introduced in the same filing. For construction and property management contracts the two editions work the same way, and either should be accepted.

What to require, and the Named Insured trap

Require primary and noncontributory status in the contract itself, in words that match the endorsement's second condition: the subcontractor agrees that its insurance is primary and will not seek contribution from any insurance available to the additional insureds. Then require CG 20 01 04 13 or 12 19, or a form at least as broad, and the same status on umbrella or excess policies, which CG 20 01 does not modify.

The first condition is the trap. CG 20 01 makes the subcontractor's policy primary only over other insurance on which the additional insured is a Named Insured. If the owner on your contract is a single-purpose project LLC that is not listed as a Named Insured on its parent's program, the condition can fail. Check that each entity you list as an additional insured is a Named Insured on its own program, or accept a carrier form that applies primary and noncontributory status to any insurance on which the additional insured is an insured.

• Contract clause stating primary and noncontributory status in writing before work starts.
• CG 20 01 (04 13 or 12 19) or an equivalent carrier form on the general liability policy.
• Umbrella and excess policies that follow form or are endorsed to apply on the same basis above the primary limits.
• Additional insured entity list reconciled with the Named Insured schedule on your own policies.

How Pikorua Security verifies primary and noncontributory status

Pikorua Security reads the CG 20 01 page or the carrier's equivalent and classifies the wording: the ISO two-condition form, a broader carrier form, or a narrower one (for example, primary only, with no noncontributory promise). Rule PN-01 checks that the classification meets your exhibit, and Rule PN-02 checks the umbrella or excess policy for matching status when your contract requires it.

Because the first condition depends on your own program, Pikorua Security stores the Named Insured schedule from your policies and compares it with the additional insured list in each subcontract. If a project entity on a subcontract is not a Named Insured on your program, it shows up as an internal action item long before any claim.