![]() ![]() The Primary and Non-Contributory Wording endorsement is meant to prevent contribution from happening. 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. Why did the claims adjuster ask this question? Because he knows that homeowners policies often cover limited amounts of business personal property. ![]() “Thank you,” says the claims adjuster, as he and his calculator slither out the door. The claims adjuster is ready to pay for the loss, but just before writing the check, asks a curious question: “Do you have a homeowners policy?” “Yes, of course,” you say. You file a claim on your business owner’s policy to recover the loss. ![]() One day while making s’mores (for a little R&D, of course), your bonfire gets out of control and burns your home to the ground, including your entire marshmallow inventory. And of course, you have a homeowners policy on your home. You have a business owner’s policy that covers your inventory. (Yes, these really exist and they’re incredible – see here). Let’s say that you – a business owner – have a home based business selling gourmet artisan alcohol-infused marshmallows online. That begs the question: what is contribution? It is simply sharing in the payment of a claim. 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. So, what is this Primary and Non-Contributory Wording thing? But sometimes, if you’re lucky, they’re free. Pricing can be around $100 per year per Primary and Non-Contributory Wording endorsement. Second, insurance companies can charge you for them. (If you want to know what an Additional Insured endorsement is, check out my previous blog post here). ![]() I know because I frequently talk to contract givers – those who require others to have the Primary and Non-Contributory Wording endorsements – and they often have no idea what they are, although they absolutely require them.īefore I explain what they are, here are a couple of things to know:įirst, 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. Primary and Non-Contributory Wording is one of the least understood insurance concepts in existence. Have you – a business owner – ever had to get a Primary and Non-Contributory Wording endorsement on your general liability policy? Have you – a business owner – ever wondered what Primary and Non-Contributory Wording actually means? ![]()
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January 2023
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