Question 1

What does 'Primary and Noncontributory' mean on an ACORD 25 certificate?

Accepted Answer

On an ACORD 25 certificate of insurance, 'Primary and Noncontributory' signifies that the downstream contractor's or subcontractor's Commercial General Liability policy will respond first to any covered third-party claim (Primary) and will not seek contribution from the additional insured's own liability policy (Noncontributory) until the downstream policy limits are fully exhausted.

Question 2

How does ISO CG 20 01 prevent contribution from an additional insured's policy?

Accepted Answer

ISO endorsement CG 20 01 04 13 modifies Section IV - Commercial General Liability Conditions, specifically Condition 4 (Other Insurance). It stipulates that coverage provided to an additional insured is primary, and the insurer will not seek contribution from any other insurance available to the additional insured provided that the additional insured is a Named Insured on that other policy and a written contract requires primary and noncontributory coverage.

Question 3

What happens if a certificate says Primary/Noncontributory but CG 20 01 is not endorsed?

Accepted Answer

Under established insurance law, the Certificate of Insurance does not confer coverage or modify policy terms. If CG 20 01 is omitted from the underlying policy, standard CGL Condition 4 applies. Both the subcontractor's and general contractor's policies are treated as concurrent primary insurance, forcing the GC's carrier to contribute equally (Equal Shares) or proportionally (Pro Rata) to defense and indemnity, tarnishing the GC's loss history.

Question 4

What is the difference between Equal Shares and Pro Rata contribution?

Accepted Answer

Under standard CGL Condition 4, if both policies permit Equal Shares contribution, each carrier pays equal amounts until the claim is settled or a policy limit is exhausted. If either policy does not permit equal shares, contribution is Pro Rata, meaning each carrier pays the proportion that its limit bears to total available limits (e.g. $1M / $2M total = 50% each).

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