1. Forms
2. CA
3. CA-04-49

Form CA 04 49: Primary And Noncontributory - Other Insurance Condition

1. What the form is

The CA 04 49 endorsement, titled "Primary And Noncontributory - Other Insurance Condition," is designed to modify the "Other Insurance" condition found in standard commercial auto policies like the Auto Dealers Coverage Form (CA 00 25), Business Auto Coverage Form (CA 00 01), and Motor Carrier Coverage Form (CA 00 20). Its primary function is to ensure that the liability coverage provided for "covered autos" under the endorsed policy acts as the primary insurance and will not seek contribution from any other insurance policy available to an "insured," under specific conditions. For auto dealers, this also applies to General Liability Coverages. This means the policy with this endorsement pays first in the event of a covered claim, before other policies that might also cover the same loss. The "noncontributory" aspect means the insurer will not ask other policies that cover the same "insured" to contribute to paying the claim.

This endorsement only applies if two key conditions are met:

• The "insured" (the party being provided primary and noncontributory coverage) must also be a Named Insured on the other insurance policy.
• There must be a written contract or agreement in place where the Named Insured on this policy has agreed that this insurance will be primary and noncontributory for that specific "insured."

2. Classes of business it applies to

This endorsement is relevant across various industries where contractual agreements often dictate insurance priority. It is commonly used in situations where one party (the Named Insured on this policy) agrees to provide primary insurance coverage for another party (who becomes an "insured" under this policy and is a Named Insured on their own separate policy). Here are some real-world examples:

• Contractors and Subcontractors: A general contractor might require a subcontractor to list them as an additional insured on a primary and noncontributory basis. If the subcontractor's policy is endorsed with CA 04 49, and a claim arises from the subcontractor's covered auto operations for which the general contractor is also liable, the subcontractor's policy would pay first without seeking contribution from the general contractor's own insurance (provided the general contractor is a Named Insured on their policy).
• Vehicle/Equipment Rentals (with operator): A business that rents out vehicles or equipment with an operator (e.g., a crane rental company with an operator) might be required by its client to provide primary and noncontributory coverage. If the client is a Named Insured on their own policy and a written agreement for primary coverage exists, the rental company's auto policy with the CA 04 49 would respond first for accidents arising from the rented auto's use by the operator.
• Trucking and Logistics: A motor carrier hauling goods for a shipper might agree to provide primary and noncontributory coverage for the shipper. If the shipper is a Named Insured on their own policy, the motor carrier's policy with this endorsement would be primary for auto liability claims related to the transport.
• Auto Dealerships: An auto dealer might have agreements with other entities (e.g., a company providing detailing services on their lot using their own vehicles) where the dealer agrees to provide primary and noncontributory auto liability coverage for that entity while performing work for the dealer.

3. Special considerations

• Written Agreement is Crucial: The most critical requirement for this endorsement to apply is the existence of a written contract or agreement where the Named Insured has explicitly agreed to provide primary and noncontributory coverage to the other party. Without this written agreement, the endorsement does not activate, and standard "Other Insurance" provisions will likely apply.
• "Insured" Must Be a Named Insured Elsewhere: The party for whom this policy is being made primary must be a "Named Insured" on their own separate insurance policy. This is a key distinction from simply being an "additional insured."
• Interaction with Standard Policy Language: The CA 00 01 (Business Auto Coverage Form) may already provide primary coverage for owned autos and for liability assumed under an "insured contract." However, to achieve noncontributory status and to ensure primacy in all contractually required scenarios, the CA 04 49 is often necessary.
• Certificates of Insurance (COIs): While a COI might state that coverage is primary and noncontributory, the COI itself does not amend the policy. The CA 04 49 endorsement must be attached to the policy for the terms to be legally binding on the insurer.
• State-Specific Regulations: While this form is listed for "All States," specific state laws or regulations regarding "other insurance" or contractual risk transfer could potentially interact with this endorsement. It's always wise to consider the legal environment of the relevant jurisdictions.

4. Key information for agents and underwriters

• Risk Assessment: When this endorsement is requested, underwriters need to carefully evaluate the contractual obligations the Named Insured is undertaking. The underwriter is essentially agreeing that this policy will step in front of another policy, which could increase the likelihood of this policy paying out. The nature of the work being performed by the party requesting primary status, their loss history, and the overall risk profile become even more significant.
• Pricing: There might be an additional premium associated with adding this endorsement, reflecting the increased exposure assumed by the insurer. The pricing will depend on the underwriter's assessment of the risk.
• Coverage Gaps: Agents should ensure that the written agreements their clients enter into accurately reflect the coverage provided by the CA 04 49. Any discrepancies could lead to disputes or coverage gaps. For example, if the contract requires broader primary coverage than what the endorsement or underlying policy provides, a gap exists.
• Underwriting Guidelines: Insurers will have their own specific underwriting guidelines for when they are willing to add this endorsement. Factors could include the financial stability of the Named Insured, the types of contracts they enter, and their claims history. Underwriters need to understand the activities and operations of the applicant thoroughly.
• Clarity of Contractual Wording: Agents should advise their clients to ensure that the "primary and noncontributory" language in their contracts is clear and unambiguous to avoid future disputes. The contract should clearly identify the parties and the scope of the primary insurance obligation.
• Verify Other Party's Insurance: While this endorsement focuses on making *this* policy primary, it's still good practice for risk management purposes to understand the insurance carried by the other party involved in the contract, although this endorsement specifically applies when that other party is a Named Insured on their own policy.