Concerning commercial insurance for common liability, what does primary and non-contributory in truth tight-fisted?
Agents are asking for this and I am looking for some useful info to help explain to them what it is and why here is additional premium associated.
Answers:
Ah, the old "extra insured on a primary and non-contributory basis" clause.
It's most easily illustrated next to an example: Joe Construction subs out some work to Jack's Plumbing, requesting this wording. It means, if Joe Construction is sued, Jack's Plumbing's GL policy covers. They pay first (primary), and Joe Construction's policy doesn't hold to kick in (non-contributory).
The ONLY means of access I ever get an underwriter to agree to that wording, is by adding more wording : "extra insured on a primary and non-contributory basis, but limited to the operation of the insured."
Otherwise, if the general or another sub causes the stroke of luck, Jack's Plumbing's GL policy has to pay. First, and lacking recourse to the general. Source(s): agent, 21+ years
Primary and Non-contributory meaning can be explained as follows. In the example of a contractor, if the contractor have this wording on their policy, the owner will be less liable for damage done to the project.
To break it down even more, Primary wording money that if an owner of a project is partially responsible for damage or injury that occur on a project, the contractors policy will pay out FIRST. The Non-Contributory wording states that in matching situation, the contractor's insurance will be the only insurance paying out.
This is fairly adjectives language for Owner's of projects to ask for, so don't be freaked out. HOWEVER, depending on your General Liability carrier, they may charge an supplementary fee to put this wording into the policy.
Good luck! Source(s): 10+ years in insurance
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Answers:
Ah, the old "extra insured on a primary and non-contributory basis" clause.
It's most easily illustrated next to an example: Joe Construction subs out some work to Jack's Plumbing, requesting this wording. It means, if Joe Construction is sued, Jack's Plumbing's GL policy covers. They pay first (primary), and Joe Construction's policy doesn't hold to kick in (non-contributory).
The ONLY means of access I ever get an underwriter to agree to that wording, is by adding more wording : "extra insured on a primary and non-contributory basis, but limited to the operation of the insured."
Otherwise, if the general or another sub causes the stroke of luck, Jack's Plumbing's GL policy has to pay. First, and lacking recourse to the general. Source(s): agent, 21+ years
Primary and Non-contributory meaning can be explained as follows. In the example of a contractor, if the contractor have this wording on their policy, the owner will be less liable for damage done to the project.
To break it down even more, Primary wording money that if an owner of a project is partially responsible for damage or injury that occur on a project, the contractors policy will pay out FIRST. The Non-Contributory wording states that in matching situation, the contractor's insurance will be the only insurance paying out.
This is fairly adjectives language for Owner's of projects to ask for, so don't be freaked out. HOWEVER, depending on your General Liability carrier, they may charge an supplementary fee to put this wording into the policy.
Good luck! Source(s): 10+ years in insurance
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