1. Forms
2. CG
3. CG-20-01

Form CG 20 01: Primary And Noncontributory - Other Insurance Condition

1. What the form is

The CG 20 01 endorsement modifies the "Other Insurance" condition within a Commercial General Liability (CGL) policy. Its primary purpose is to stipulate that the insurance coverage provided by the policy to an additional insured is primary and will not seek contribution from any other insurance policy available to that additional insured. This means that if a claim arises that is covered by this policy and also by another policy under which the additional insured is a named insured, this policy will respond first, up to its applicable limits, before the additional insured's own policy is expected to contribute. This endorsement is typically activated when there is a written contract or agreement between the named insured and the additional insured requiring this primary and noncontributory status.

2. Classes of business it applies to

This endorsement is widely used across various industries, particularly where contractual agreements necessitate that one party's insurance be primary and noncontributory for an additional insured. It is very common in the following scenarios:

• Construction: This is perhaps the most frequent application. General contractors often require their subcontractors to carry CGL policies where the general contractor is an additional insured, and the subcontractor's policy is primary and noncontributory. For example, if an employee of a subcontractor (the named insured) negligently causes an injury at a construction site, and both the subcontractor and the general contractor (the additional insured) are sued, the subcontractor's CGL policy with this endorsement would pay first for the general contractor's liability arising from the subcontractor's work, without seeking contribution from the general contractor's own liability insurance.
• Landlord/Tenant Agreements: Commercial leases often require tenants to name their landlords as additional insureds on their CGL policies and stipulate that the tenant's insurance is primary and noncontributory for liabilities arising out of the tenant's operations or leased premises. For instance, if a customer slips and falls in a retail store (the tenant), and both the tenant and the building owner (the landlord/additional insured) are found liable, the tenant's CGL policy with this endorsement would respond first for the landlord's liability.
• Service Agreements: Companies hiring vendors or service providers (e.g., maintenance, security, janitorial services) may require the service provider to include them as an additional insured on a primary and noncontributory basis. If the service provider's actions lead to a claim against the company, the service provider's policy is intended to be the first line of defense.
• Manufacturing/Distribution Agreements: Manufacturers might require distributors to carry insurance that is primary and noncontributory for liabilities arising from the distributor's handling or sale of the products.

3. Special considerations

• Written Agreement: The CG 20 01 endorsement explicitly states that its provisions apply only when the named insured has agreed in writing in a contract or agreement that their insurance would be primary and noncontributory for the additional insured. Without such a written agreement, the endorsement may not provide the intended priority of coverage.
• Additional Insured Status: This endorsement modifies the "Other Insurance" condition; it does not, by itself, grant additional insured status. The party must first be added as an additional insured to the policy through a separate additional insured endorsement (e.g., CG 20 10, CG 20 26, CG 20 33, CG 20 38).
• Interaction with Other Insurance Clauses: Standard CGL policies typically state that if the insured is an additional insured under another policy, that other policy is primary. The CG 20 01 reinforces this principle for the benefit of the additional insured, making the named insured's policy primary and preventing it from seeking contribution from the additional insured's own policy (provided the additional insured is a named insured on that other policy). Some argue that this endorsement may not significantly alter the coverage outcome if both policies have standard ISO "Other Insurance" wording, but it provides clarity and satisfies contractual requirements.
• Certificate of Insurance (COI): While a COI may indicate that coverage is primary and noncontributory, the COI itself does not amend the policy. The CG 20 01 endorsement must actually be part of the policy for this condition to apply. Demands for "primary and noncontributory" wording on COIs are frequent, and this endorsement helps to meet that requirement.
• Self-Insured Retentions (SIRs): The presence of an SIR on the additional insured's policy generally does not negate the primary and noncontributory intent of this endorsement when attached to the named insured's policy. The named insured's policy is still intended to respond before the additional insured's SIR or other insurance.
• Umbrella/Excess Policies: It's important to note that the CG 20 01 applies to the CGL policy to which it is attached. It does not automatically make any accompanying umbrella or excess liability policies primary and noncontributory. Umbrella/excess policies have their own "Other Insurance" conditions.

4. Key information for agents and underwriters

• Pricing/Risk Assessment: While ISO has stated that this endorsement has "no impact on coverage" from their perspective (meaning it clarifies rather than expands coverage in many standard situations), underwriters should still consider the implications. By making the policy definitively primary and agreeing not to seek contribution, the insurer is taking on the first-dollar defense and indemnity for the additional insured's vicarious liability (or direct liability as covered by the additional insured endorsement). This can increase the likelihood of the policy being triggered. The premium charged for the underlying additional insured endorsement should reflect the anticipated risk.
• Contractual Review: Agents and underwriters should emphasize to their named insureds the importance of carefully reviewing contracts that require primary and noncontributory status. The policy, with the CG 20 01 and appropriate additional insured endorsements, should align with these contractual obligations to avoid breach of contract situations.
• Clarity and Dispute Avoidance: The primary benefit of this endorsement is often to provide clarity and meet explicit contractual demands, thereby potentially reducing disputes over which policy pays first in the event of a claim involving an additional insured.
• Underwriting Guidelines: Underwriters should verify that a written contractual agreement requiring primary and noncontributory status exists before readily adding this endorsement. They should also assess the nature of the additional insured's operations and their relationship with the named insured to understand the potential exposure.
• Pairing with Correct Additional Insured Endorsements: It is crucial to ensure that the correct additional insured endorsement is used in conjunction with the CG 20 01 to accurately reflect the intended scope of coverage (e.g., for ongoing operations, completed operations, or both). For instance, if a contract requires primary and noncontributory coverage for completed operations, the CG 20 37 (Additional Insured – Owners, Lessees or Contractors – Completed Operations) would be necessary in addition to the CG 20 01.