{"id":2324,"date":"2016-03-14T17:07:00","date_gmt":"2016-03-14T17:07:00","guid":{"rendered":"https:\/\/gillespieinsuranceservices.com\/?p=2324"},"modified":"2025-04-17T12:52:20","modified_gmt":"2025-04-17T12:52:20","slug":"primary-non-contributory-wording-endorsement","status":"publish","type":"post","link":"https:\/\/finfrockweb.com\/gis\/business-insurance\/primary-non-contributory-wording-endorsement\/","title":{"rendered":"What Is A Primary And Non-Contributory Wording Endorsement?"},"content":{"rendered":"

Have you \u2013 a business owner \u2013 ever had to get a Primary and Non-Contributory Wording endorsement on your general liability policy?\u00a0 Have you \u2013 a business owner \u2013 ever wondered what Primary and Non-Contributory Wording actually means?<\/h4>\n

Primary and Non-Contributory Wording is one of the least understood insurance concepts in existence.\u00a0 I know because I frequently talk to contract givers \u2013 those who require others to have the Primary and Non-Contributory Wording endorsements \u2013 and they often have no idea what they are, although they absolutely require them.<\/p>\n

Before I explain what they are, here are a couple of things to know:<\/p>\n

First, you will only need a Primary and Non-Contributory Wording endorsement from the entity that has also required you to add them as an Additional Insured on your policy.\u00a0 (If you want to know what an Additional Insured endorsement is, check out my previous blog post here<\/a>).<\/p>\n

Second, insurance companies can charge you for them.\u00a0 Pricing can be around $100 per year per Primary and Non-Contributory Wording endorsement.\u00a0 But sometimes, if you\u2019re lucky, they\u2019re free.<\/p>\n

So, what is this Primary and Non-Contributory Wording thing?<\/p>\n

It is an endorsement that makes your insurance policy the first one to pay and prohibits your insurance policy from seeking contribution from another insurance policy.<\/em><\/strong><\/p>\n

That begs the question: what is contribution?\u00a0 It is simply sharing in the payment of a claim.\u00a0 Let\u2019s say that you \u2013 a business owner \u2013 have a home based business selling gourmet artisan alcohol-infused marshmallows online.\u00a0 (Yes, these really exist and they\u2019re incredible \u2013 see here<\/a>).\u00a0 You have a business owner\u2019s policy that covers your inventory.\u00a0 And of course, you have a homeowners policy on your home.\u00a0 One day while making s’mores (for a little R&D, of course), your bonfire gets out of control and burns\u00a0your home to the ground, including your entire marshmallow inventory.\u00a0 You file a claim on your business owner\u2019s policy to recover the loss.\u00a0 The claims adjuster is ready to pay for the loss, but just before writing the check, asks a curious question: \u201cDo you have a homeowners policy?\u201d\u00a0 \u201cYes, of course,\u201d you say.\u00a0 \u201cThank you,\u201d says the claims adjuster, as he and his calculator slither out the door.\u00a0 Why did the claims adjuster ask this question?\u00a0 Because he knows that homeowners policies often cover limited amounts of business personal property.\u00a0 If this is true, then both policies have a duty to pay, and the business owners claims adjuster will see to it that both policies will their fair share.\u00a0 That is contribution.<\/p>\n

The Primary and Non-Contributory Wording endorsement is meant to prevent contribution from happening.\u00a0 The Primary & Non-Contributory Wording endorsement says \u201cthis insurance will be the first one to pay (primary), and will not seek contribution from any other source (non-contributory).\u201d<\/p>\n

Lastly, the reason the Primary and Non-Contributory Wording endorsement accompanies an Additional Insured endorsement is because the entity that requires you to have them both knows that your insurance company knows that it has its own insurance. \u00a0And if your insurance company pays a claim on that entity\u2019s behalf, that entity believes\u00a0your insurance company is likely to seek contribution from that entity\u2019s insurance, defeating the purpose of the additional insured endorsement.<\/p>\n

And that is it.\u00a0 Since 1997 there have been reasons to eliminate the Primary and Non-Contributory Wording endorsement altogether, but that is a different post for a different day.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Have you \u2013 a business owner \u2013 ever had […]<\/p>\n","protected":false},"author":3,"featured_media":3494,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,20,21,17,7,11],"tags":[2,19,22,16,18,10],"class_list":["post-2324","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-insurance","category-contractors","category-farm-agriculture","category-general-liability","category-liability-insurance","category-wineries","tag-business-insurance","tag-contractors","tag-farm-agriculture","tag-general-liability","tag-liability-insurance","tag-wineries"],"_links":{"self":[{"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/posts\/2324","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/comments?post=2324"}],"version-history":[{"count":1,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/posts\/2324\/revisions"}],"predecessor-version":[{"id":44626,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/posts\/2324\/revisions\/44626"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/media\/3494"}],"wp:attachment":[{"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/media?parent=2324"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/categories?post=2324"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/tags?post=2324"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}