1. Forms
2. CX
3. CX-24-32

What the Form Is

The CX 24 32 12 23, titled "Noncontributory And Order Of Response – Other Insurance Condition," is an endorsement designed for use with Insurance Services Office, Inc. (ISO) excess liability policies. Its primary function is to alter the standard "Other Insurance" condition within the policy. Specifically, this endorsement ensures that if the named insured has formally agreed in a written contract or agreement that their excess liability coverage will apply on a primary and noncontributory basis for a scheduled additional insured, the policy will respond accordingly. This means the excess policy will pay before any other insurance available to the additional insured and will not seek contribution from the additional insured's own insurance policies.

Classes of Business It Applies To

This endorsement is particularly relevant for businesses that frequently enter into contracts requiring them to provide primary and noncontributory insurance coverage to other parties. Common examples include:

• Construction: Subcontractors are often required by general contractors to provide primary and noncontributory excess liability coverage. In such a scenario, the subcontractor (named insured) would add this endorsement to their excess policy to honor the contractual agreement for the benefit of the general contractor (additional insured).
• Service Agreements: Companies providing services to larger entities might be contractually obligated to ensure their liability insurance is primary and noncontributory for liabilities arising from their work.
• Lease Agreements: Tenants might be required by landlords to provide primary and noncontributory coverage for liabilities related to the leased premises.

Special Considerations

• Written Agreement Required: The application of this endorsement is contingent upon a written contract or agreement where the named insured has explicitly agreed to provide coverage on a primary and noncontributory basis to the scheduled additional insured.
• Order of Response: This form helps clarify the order in which policies respond, aiming for a "vertical exhaustion" of limits where the named insured's policies (including the excess policy with this endorsement) pay out before the additional insured's own policies are triggered for the covered claim.
• Interaction with Other Endorsements: For the intended coverage hierarchy to function seamlessly, particularly involving underlying Commercial General Liability (CGL) policies, other endorsements might be necessary. For instance, the ISO endorsement CG 24 56 (Excess Insurance Provision – Order Of Response – When You Are An Additional Insured On Other Insurance) can be added to the additional insured's CGL policy to make it excess over the named insured's umbrella/excess policy that has the CX 24 32 (or CU 24 77 for umbrella) endorsement.

Key Information for Agents and Underwriters

• Contractual Review: Agents and underwriters must carefully review contracts and agreements signed by the insured to identify any requirements for providing primary and noncontributory coverage. This is crucial for determining the need for this endorsement.
• Risk Assessment: When this endorsement is added, the excess policy has a higher likelihood of responding on behalf of the additional insured, potentially before the additional insured's own coverage. This should be factored into the risk assessment and pricing of the excess policy.
• Avoiding Disputes: By clearly defining the order of response when primary and noncontributory obligations exist, this endorsement can help prevent coverage disputes between the named insured's insurer and the additional insured's insurer.
• Proper Scheduling: Ensure that the additional insured for whom the primary and noncontributory coverage is intended is properly scheduled on the endorsement or policy as required.
• Client Counseling: Agents should counsel insureds on the implications of agreeing to provide primary and noncontributory coverage and the importance of using endorsements like the CX 24 32 to meet these contractual obligations.