Primary and Non-contributory Gaps

When there exists multiple insurance policies that could cover the same claim, each insurer may ask the other to split the bill and make an equal contribution.

Landlords do not want a tenant or vendor’s insurance company to seek contributions towards any claim from their own insurance company because this will cause the landlord’s premium to increase. For this reason, landlords require that tenants and vendors prove that their insurance is Primary and Non-contributory. 

If a policy is Primary and Non-contributory, it will pay for any eligible claims that may arise to the full extent allowed by the policy limits without asking for contributions from any other insurance policy.

Read more about Primary and Non-contributory

A Primary and Non-contributory provision can either be evidenced in the form of a separate endorsement or else in the Description of Operation of a COI as in the example below.

If there is no space to write it into the Description of Operation, it can be mentioned on an Additional Remarks (ACORD 101) page.

Sometimes just noting on a COI that an insurance policy is Primary and Non-contributory is not enough. After all, COIs have no legal standing and are only meant to summarize the information contained within an insurance policy. 

For this reason, landlords often require vendors and tenants to submit an actual endorsement evidencing the policy’s Primary and Non-contributory status. This is a separate page that effectively amends the insurance policy in a way that is legally binding. The insured may have to pay an additional fee for the insurer to produce such an endorsement.

A Primary and Non-contributory endorsement can look many different ways depending on the insurer, but you can see a few common examples below.