If you look for the definition of “noncontributory” in an online dictionary, you will find the following: “not providing contribution; noncontributing.” Interestingly, there are also a number of specific insurance-related definitions for the term, but every single one applies to pension plans. Thus, any court seeking edification and illumination for a contract requirement for a commercial liability form to be “primary and noncontributory” will likely end up with our first definition, which adds exactly nothing to the discussion.

But why are we looking at an online dictionary when the term is a specific requirement of an insurance agreement? Ah, grasshopper, a simple question with an equally simple answer: No ISO policy form defines the term.

Related: Read another Amrhein column “Take It Easy.”

theAs a quick refresher for those who came to these articles late in the game, let's digress to a brief summary of the clear path courts follow when called upon to determine the meaning of a specific term or phrase as it pertains to insurance coverage.

• First, look to the policy itself. Every policy form includes a section for terms or phrases that have a specific definition as to that form. Sometimes such terms are also defined with the specific section of the policy pertaining to that term, but typically the pertinent definitions are all contained within one part of the policy, often cleverly titled “Definitions.”
• If the particular term is not defined within the policy, the courts then turn to a commonly accepted unabridged dictionary, seeking the ordinary, common usage of the word or phrase.
• Once a definition has been found, either within the policy or in a dictionary, that same meaning is then read into the policy to determine if it clarifies coverage intent. If not, then the court is free to interpret the policy term in another acceptable way, or simply declare the term “ambiguous,” in which case the insured gets the benefit of any doubt under the doctrine of “contract of adhesion.”

Digression complete. We now return to the original question: What exactly does the term “noncontributory” mean when applied to standard ISO commercial liability forms? As no specific definition appears in ISO standard forms, we quote the dictionary and find it means “not providing contribution; noncontributing.”

And in the context of the typical appearance of said term in our world of liability insurance—to wit, additional insureds who wish the party adding them to certify his or her insurance is “primary and noncontributory” to the additional insured's coverage—what do we now know? Replace the word with its definition and we now have a requirement the named insured must add the additional insured and certify his or her insurance is “primary and not providing contribution.” If you think that cleared things up, I'll see you and Pink Floyd on the dark side of the moon. “The lunatic is in my head,” indeed.

Related: Read the column “Playing COI” by Chris Amrhein.

The additional insured's intent may seem clear; he wants the named insured's coverage to be primary to his. Fair enough, but didn't he accomplish that with the “primary” wording? What does “noncontributory” add or subtract from the equation?

The key for agents is to understand that absent a clear definition of the term “noncontributory” we simply cannot answer the question. In classrooms and emails I have repeatedly heard and read otherwise intelligent folks saying things like the following (with my brief comments on each):

“Oh, you and I both know what they want.” (Funny, you don't look like the Amazing Kreskin.)

“I've been told that our carrier has an endorsement that will handle that.” (And I've been told that Blue Cheer did the best version of “Summertime Blues” but I'm sticking with the Who.)

“It's a standard contract requirement. We see that all the time.” (I confess I have no idea how that solves the problem, but it certainly seems to make the agent feel better. In pharmacy, I believe that's called a “placebo.”)

“The ISO CGL takes care of that automatically by making the named insured's coverage primary to the additional insured's.”

As that last one is a common statement in many articles and online forums, it begs more than a single sentence response.

Related: Read the column by Chris Amrein “Cross the Bridge.”

In short, the ISO CGL does no such thing. The part of the policy no doubt being referred to is found in the Other Insurance provisions, b. (2):

“b. Excess Insurance This insurance is excess over:

(2) Any other primary insurance available to you covering liability for damages arising out of the premises or operations for which you have been added as an additional insured by attachment of an endorsement.

Note a couple of key items. The language does not make the named insured's policy primary, it simply makes the additional insured's policy excess. Same thing, you say? Not necessarily, for four primary reasons.

1. This language appears in the additional insured's policy, not the named insured's. So while the additional insured's carrier clearly expects to be excess, the named insured's policy may have a different or even contradictory opinion. If both policies are standard issue ISO CGL forms, the named insured's carrier likely will honor the language, but considering how much customization and nonstandard forms float about the construction industry, for example, assuming two identical forms may be more of a stretch than you assume.
2. If the named insured is covered by a non-ISO form, note that the language in the additional insured's policy has absolutely no binding power over the named insured carrier to make his policy primary. It may be, or may not.
3. Note that the ISO language states the excess language applies “for which you have been added as an additional insured by attachment of an endorsement.” In some proprietary liability forms, similar language to ISO's “automatic” endorsement is built into the form itself. The good news is the additional insured is automatically added; the bad news is no endorsement was used, so the above ISO CGL provision in the additional insured's policy is meaningless.
4. Even if the named insured and additional insured are on the same basic ISO CGL forms and the policy language above works as intended, it does not modify in any way excess policies such as umbrellas that may form key layers of the contractually required liability limits between the two parties.

Even if we clarify and resolve all of the above issues, we have still only met the “primary” portion of the “primary and noncontributory” phrasing. Which brings us back to where we began: What in the wide, wide world of sports is the meaning of that specific term, and how does it add to/change a simple requirement for “primary” coverage?

We still don't know. But we clearly cannot state categorically our insured has complied with the “primary and noncontributory” requirement without further discovery and research. As of this writing I have yet to see a clear and precise definition in an actual policy form. Thank you to the agents and company folks who have over the months sent me copies of carrier specific endorsements that ostensibly address the issue, but I have yet to find one that did it clearly and concisely. The majority, in fact, seem simply to be designed to get agents to quit bothering them asking for endorsements, basically stating, in a plethora of legalism, the following: “Whenever it is required this insurance be primary and noncontributory, it is.”

Permit me a summary of where I believe agents need to go from here:

1. Never certify you have done something you aren't absolutely sure you have done. Such advice, of course, is foundational, but seems a particular problem when dealing with this requirement.
2. It is the party drafting the requirement that is responsible to clarify their intent, not yours to assume it. Don't let them off the hook; if the meaning is so “clear” and understood by all, it should be no problem to furnish you a copy of said clarity and understanding.
3. If anyone including a carrier tells you they are providing the coverage, ask them to prove it.
4. If furnished a specific endorsement addressing the issue, make certain to match it to the clarification you received in response to No. 2 above, to be certain it actually accomplishes what you are being asked to certify.
5. Never put any of this or any other “clarification” in the “remarks” field of a COI. If required to furnish some proof of compliance, only after verifying steps Nos. 1 through 4, would I suggest you note in the remarks field “see attached” and then attach a copy of the endorsement from step No. 4.

Yes, that's a hassle. But this wasn't your idea, it was theirs. But cut this short and it's your neck on the block, not theirs. It may be just another brick in the wall, but no sense letting it fall on your head.

Kind of makes that whole colonial thing about tea and taxes seem minor, doesn't it? Yet those led to a revolution which we celebrate with fireworks and parties. Surely in comparison freeing ourselves of this one thorn-in-the-side insurance term isn't too much to ask?

Dare to dream. Happy Fourth!