Primary and Non-Contributory: What GCs Need to Know
Primary and non-contributory language determines whose insurance pays first when a claim happens. Here's what it means, why GCs require it, and how to verify it.
TL;DR: Primary and non-contributory (PNC) language forces the sub's insurer to pay a claim first and in full without demanding contribution from the GC's insurer, protecting the GC's loss runs, aggregate limits, and renewal premiums. PNC is one of the three non-negotiable requirements alongside Additional Insured status and Waiver of Subrogation, and GCs should see it referenced explicitly in the Description of Operations box on every sub's ACORD 25.
If your subcontract requires subs to carry insurance that is "primary and non-contributory" with respect to your own insurance, and you're not 100% sure what that means or how to verify it. This post is for you.
Primary and non-contributory (PNC) language is one of the three critical elements every GC should require from every sub, alongside Additional Insured status and Waiver of Subrogation. Getting it wrong leaves your own insurance on the hook for claims the sub caused, which drives up your premiums and exposes you to losses that shouldn't be yours.
What Does "Primary and Non-Contributory" Mean?
Let's break it into two parts.
Primary
When two insurance policies both cover the same loss, one must pay first. That policy is the "primary" policy. If the primary policy's limits are exhausted, the "excess" policy kicks in.
Requiring the sub's policy to be primary means: the sub's insurance pays first, before yours gets involved. Your policy becomes the backup that fills in only if the sub's limits are exhausted.
Without primary language, both policies share the loss proportionally. Typically based on each policy's limits (the "equal shares" or "pro-rata" method). That means a claim the sub caused still hits your insurance, still shows up on your loss history, and still contributes to your premium increases at renewal.
Non-Contributory
"Non-contributory" takes the primary concept a step further. It says: the sub's insurer cannot demand that your insurer contribute to the loss. Even partially.
Without non-contributory language, even if the sub's policy is technically primary, their insurer can still try to make your insurer contribute to the claim. They file a contribution demand, your insurer gets involved, and you're back in the same mess.
Together, primary and non-contributory language ensures the sub's policy pays first, in full, without involving your insurance at all (up to the sub's policy limits).
Why PNC Matters for GCs
Three reasons this is worth caring about.
1. Your Premiums
Every claim that touches your insurance. Even as a contributor. Affects your loss runs. Your loss runs determine your premium at renewal. Even if you didn't cause the loss, your insurer paying on it hurts you. PNC language keeps claims caused by subs off your loss runs entirely.
2. Your Policy Limits
Your CGL policy has aggregate limits. A cap on how much your insurer will pay across all claims in a year. Every dollar your insurer pays on a sub-caused claim is a dollar less available for claims you actually caused. PNC preserves your aggregate for your own exposures.
3. Carrier Disputes
When two carriers both think the other should pay first, the result is slow, expensive, and sometimes requires litigation between the insurers themselves to sort out. PNC language prevents these fights by making the order of payment unambiguous.
The Form: CG 20 01
The ISO endorsement that grants primary and non-contributory coverage on a Commercial General Liability policy is CG 20 01. "Primary and Noncontributory. Other Insurance Condition." This endorsement amends the "Other Insurance" clause in the base CGL policy to make coverage primary and non-contributory with respect to any Additional Insured.
Alternatively, and this is common today. The primary and non-contributory language is built directly into the Additional Insured endorsement (CG 20 10 or CG 20 37) via an attached blanket modification. Either approach is valid. What matters is that the PNC language is somewhere in the policy's endorsement stack and is verifiable.
Do not accept PNC language only on the COI's Description of Operations box. As with AI and waiver of subrogation, the COI is a summary. Verify the actual endorsement.
The Three-Step Verification Process
For every sub, before the job starts:
- Check the subcontract. It should explicitly require the sub's CGL and any Excess policies to be primary and non-contributory with respect to your insurance.
- Check the COI. Description of Operations should reference "Primary and Non-Contributory" language and ideally cite CG 20 01 or the specific endorsement providing it.
- Request the endorsement. Ask the sub's producer to email the CG 20 01 endorsement page or the relevant PNC language from their AI endorsement. File it with the COI.
This takes about five minutes per sub and eliminates the most common coverage dispute in subcontractor claims.
What About Umbrella and Excess Policies?
Primary and non-contributory requirements typically apply to the sub's primary CGL. For umbrella or excess policies, the requirement is different. You want the sub's umbrella to "follow form" (mirror the terms of the underlying CGL) so that primary and non-contributory cascades up through the excess tower.
If your subcontract has high limit requirements (say, $5M or $10M total), make sure the umbrella language also captures AI and PNC. An umbrella that excludes these can leave a coverage gap above the $1M primary layer.
Common Mistakes
- Assuming PNC is automatic because you're Additional Insured. AI status doesn't automatically make coverage primary. You need separate PNC language.
- Relying on the COI. Same story as AI and waiver of subrogation. The COI is a summary, not a contract. Verify the endorsement.
- Forgetting the umbrella. If your contract requires $5M limits and only the primary $1M is PNC, the $4M above is exposed.
- Using old ISO forms. Pre-2004 versions of CG 20 10 had built-in PNC; post-2004 versions often don't. This is why CG 20 01 exists. To add PNC explicitly to modern AI endorsements.
- Subcontract doesn't require PNC. If your subcontract is silent on PNC, blanket PNC endorsements may not apply to you. Contract language drives everything.
Sample Subcontract Language
Here's tight language you can adapt into your subcontractor agreement (talk to your construction attorney before using it verbatim):
Subcontractor's Commercial General Liability and Umbrella/Excess Liability insurance shall be primary and non-contributory with respect to any insurance or self-insurance maintained by Contractor, regardless of any other insurance available to Contractor. Subcontractor shall provide Contractor with a Primary and Non-Contributory endorsement on ISO form CG 20 01 (or equivalent) or, alternatively, primary and non-contributory language contained within the Additional Insured endorsement. Subcontractor's insurance shall not seek contribution from Contractor's insurance.
How PaperBoss Helps
PaperBoss gives you a structured checklist on every subcontractor's compliance record: COI received, Additional Insured endorsement (CG 20 10 and CG 20 37), Primary and Non-Contributory (CG 20 01), Waiver of Subrogation (CG 24 04), W-9, Workers' Comp. Each item is tracked independently, and you can upload the actual endorsement documents alongside the COI so everything is in one place.
When a claim happens or an auditor asks, you're not hunting through email. You pull the sub's record and every document is there, dated, and organized.
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Frequently Asked Questions
Is primary and non-contributory the same as Additional Insured?
No. Additional Insured makes you a covered party under the sub's policy. Primary and non-contributory determines when that coverage pays. You need both. One without the other leaves gaps.
Can a sub refuse to make coverage primary and non-contributory?
Some carriers resist adding CG 20 01 or will charge a fee. In most cases, the fee is nominal and the sub can get the endorsement with a phone call to their producer. If a sub refuses outright, it's a red flag. They probably have a minimal insurance program that won't handle real construction exposures.
Does PNC language apply to Workers' Comp?
No. Workers' Comp is statutory and the primary/non-contributory concept doesn't apply the same way. For WC, you want a Waiver of Subrogation endorsement (WC 00 03 13) instead.
What happens if both the sub and the GC have the same insurance carrier?
This actually simplifies things in some ways, because the carrier handles both sides of the claim internally. But PNC language is still important because the carrier still needs to know which policy to charge against.
Does primary and non-contributory apply to the owner too?
If the owner is named as an additional insured on the sub's policy with primary and non-contributory language. Yes. Most construction contracts push this entire chain: sub's coverage is primary for both the GC and the owner. Use the same verification process for both parties.
This article is for educational purposes only and does not constitute legal or insurance advice. Consult a licensed construction insurance broker or attorney for specific guidance.
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