Two words about payment order that decide who funds the defense.
“Primary” means your policy pays first rather than sharing. “Non-contributory” means your carrier gives up its own right to go after the other party's insurer for a share of what it paid. Together they put your policy at the front of the line and keep it there. The standard CGL wording does not clearly say that, which is why contracts ask for the CG 20 01 endorsement by name.
CG 20 01 only applies where both conditions are met: the additional insured is a named insured under their own policy, and you agreed in writing that your insurance would be primary and non-contributory.They are separate ideas, and separating them is most of the battle.
Primary answers a question about order: when two policies could respond to the same claim, which one pays first, and which sits behind it? A policy that is primary pays from the first dollar rather than waiting for another policy to exhaust, and rather than splitting the loss pro rata.
Non-contributory answers a different question, and it is about your insurer rather than about you. Insurers have their own right — independent of anything you hold — to demand that other insurers covering the same loss pay their share. Non-contributory means your carrier agrees not to exercise it. The general contractor's insurer does not want to be chased for half the defense cost six months into the claim.
Put together, the requirement means: your policy funds the whole thing, and your carrier will not come knocking on theirs.
Modern ISO commercial general liability policies already contain an Other Insurance condition that goes some of the way. Since the 1997 revision, when another policy covers you as an additional insured, your own policy is generally excess over it — which removes the contribution problem in that direction.
That is not what a contract is asking about. The general contractor is not asking about your policy's treatment of coverage you receive from someone else. They are asking about the coverage they receive from you, and they want it stated in the policy rather than inferred from a condition and a line of case law.
Hence CG 20 01, whose full title is Primary And Noncontributory – Other Insurance Condition. It says so in terms.
The endorsement provides that your insurance is primary to and will not seek contribution from any other insurance available to an additional insured — but only where both of the following are true:
Both conditions, not either. The second is the one that catches people out. There is no such thing as retroactive primary and non-contributory status conferred by a certificate — the written agreement has to exist, and it has to exist before the loss. If your contract is silent and the requirement only ever appeared in an email or on a certificate, the endorsement's trigger has not been met.
The first condition is quieter but does real work. The endorsement addresses other insurance under which the additional insured is a named insured — their own policy. It is not a promise about every conceivable policy in the tower.
This is the part that is almost never discussed during contract negotiation and regularly matters at claim time.
A “follow form” umbrella does not automatically inherit the underlying CGL's primary and non-contributory wording. The umbrella carries its own Other Insurance condition, which typically makes it excess over any other collectible insurance — including the additional insured's own primary policy. So the contract's intended order of payment is honoured at the primary layer and then inverted the moment the loss goes above it.
If your contract requires primary and non-contributory coverage at limits that can only be reached with the umbrella — a $5,000,000 requirement against a $1,000,000 CGL, say — the umbrella needs to be looked at specifically. Some carriers will endorse it. Some will not. Finding out which during underwriting is considerably better than finding out during a tender.
Send the insurance article of the contract, not a summary of it. We are looking for the exact sentence, because the endorsement's second condition turns on there being a written agreement that says this. Specifically we want to see:
Those four questions between them decide what endorsements your policy needs and roughly what they cost. We would rather answer them while you are bidding than after you have signed.
This page explains how these endorsements and contract terms generally work. It is not a coverage opinion. What your policy actually covers is decided by the policy language, the endorsement editions actually attached, and the contract you signed — all of which we are happy to read. Send us the requirements or call (704) 461-3020.