What does primary and noncontributory mean?

When your tree service is hired by a general contractor or property manager, their contract almost always requires that your GL policy be primary and noncontributory with respect to work you perform for them. This seemingly simple phrase has significant financial implications for how claims are handled and which insurance policy pays.

Without a primary and noncontributory endorsement, when a claim involves both your company and the additional insured (your client), the two GL policies would share the loss on a pro-rata or equal-share basis under standard 'other insurance' clauses. This means your client's policy would be required to contribute to the claim payment, which increases their loss history, potentially raises their premiums, and defeats the purpose of requiring you to carry insurance in the first place.

The primary and noncontributory endorsement changes this dynamic. 'Primary' means your policy responds first, before the additional insured's own coverage. 'Noncontributory' means your policy will not seek contribution from the additional insured's policy — even if their policy would otherwise share in the loss. In practical terms, your $1 million GL policy pays the full claim (up to its limits) before the additional insured's carrier pays anything. The additional insured's policy only responds if the claim exceeds your policy limits.

ISO endorsement CG 20 01 (Primary and Noncontributory — Other Insurance Condition) is the standard form for adding this provision. Many carriers also include primary and noncontributory language in their blanket additional insured endorsements, eliminating the need for a separate endorsement. Check your policy's endorsement schedule to confirm — if primary and noncontributory language is included in your blanket additional insured endorsement, you do not need CG 20 01 separately.

The cost of adding primary and noncontributory coverage is typically minimal — often included at no additional premium or for a small flat fee. However, the implications for your coverage are real. Because your policy is paying first and in full, your per-occurrence and aggregate limits are consumed faster. This reinforces the importance of carrying adequate umbrella or excess liability limits. A tree service with $1M/$2M GL limits and a primary and noncontributory endorsement that takes on multiple large commercial contracts can exhaust its aggregate limit quickly if claims arise. An umbrella policy of $2 million to $5 million provides the buffer needed to maintain coverage throughout the policy year.

Always verify that the primary and noncontributory endorsement on your COI matches the exact language your client's contract requires. Some contracts specify particular ISO form numbers or edition dates, and a mismatch can result in a compliance rejection.