Streetsmart insurance Blog
If you need to add a client to your general liability insurance policy, they may ask for an endorsement that states they are primary and non-contributory. Although this language is difficult to understand, using the primary and non-contributory endorsement protects you and your additional insureds from legal claims.
A primary designation allows an additional insured to receive coverage under your insurance policy if any claims related to your professional liability affects their business. Many clients who require primary coverage will have insurance policies of their own, but they want to make sure that they are not required to pay for any acts of negligence on your part.
Non-contributory means that an additional insured is not liable for compensation apart from the coverage provided by your insurance policy. This language guarantees that your client will not have to use their own insurance to cover your negligence. It also prevents you from entering into legal problems with your client if a claimant files a joint suit.
The primary and non-contributory endorsement allows you to deal with potential legal issues up front, saving you and your client the stress of negotiating joint and several liability in the event of a claim.
When Would I Need The Primary And Non-Contributory Endorsement?
There are many reasons that business owners choose to add a primary and non-contributory endorsement to their general liability policy. Here are two of the most common scenarios:
Contractor: In construction, subcontractors are often required to add general contractors to their insurance policy as additional insureds. The primary and non-contributory endorsement protects general contractors and business owners from mistakes that are made by the contractors working under them.
Landlord: When renting commercial property, landlords typically require the primary and non-contributory endorsement on their tenant’s insurance policies. If their tenant is sued, the landlord is protected from any financial liability that may arise due to their tenant’s negligence.
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Whether you are looking for your first general liability insurance policy or you are shopping for a better price, our agents are ready to help.