Why does my operator want primary and non-contributory?

When the operator is an additional insured on your general liability policy, it now has two policies that might apply to the same claim: yours and its own. Every liability policy has an "other insurance" condition that decides how those policies split the loss. Without special wording, your insurer may argue it should only pay a share, or only pay after the operator's insurance is used up.

The operator does not want its own program, or its loss history, touched by claims that came out of your work. Primary and non-contributory wording takes that argument off the table. It ties directly to the indemnity structure in your MSA: if you have agreed to protect the operator for certain claims, your insurance is supposed to be the money behind that promise. See knock-for-knock indemnity for how that allocation usually works.

The standard form is CG 20 01, titled "Primary and Noncontributory: Other Insurance Condition." The 12 19 edition modifies the commercial general liability coverage part (along with the liquor liability and products/completed operations coverage parts). It adds language to the Other Insurance condition stating that the insurance "is primary to and will not seek contribution from any other insurance available to an additional insured," but only if two conditions are met:

1. The additional insured is a Named Insured on that other insurance.
2. You "have agreed in writing in a contract or agreement" that your insurance would be primary and would not seek contribution.

Two practical takeaways. First, the endorsement does nothing for a party who is not already an additional insured, so it has to be paired with an additional insured endorsement. Second, it depends on your written contract. If the MSA is silent on primary and non-contributory, the endorsement on your policy may not apply to that operator.

Operators usually ask for three things together. Each one does a different job.

CG 20 01 modifies general liability. It does not change your auto policy or your umbrella. If the MSA requires primary and non-contributory on "all policies," each policy needs its own wording that accomplishes it, and the umbrella needs to recognize the operator as an insured and say how it responds relative to the operator's own coverage.

This is one of the most common reasons a certificate gets kicked back in prequalification: the GL is endorsed properly but the auto or umbrella is not. Our pages on oilfield auto insurance and oilfield umbrella insurance go into each line, and why a certificate gets rejected covers the review side.

Before the MSA is signed, or before the next renewal, run through this list with the contract in hand:

• Which policies does the MSA say must be primary? Some say general liability only. Others say all liability policies, including auto, umbrella, and sometimes pollution.
• Does the MSA say it in writing? CG 20 01 only works if you agreed in a written contract that your insurance would be primary and non-contributory. A vague "contractor's insurance shall respond first" may or may not be read that way.
• Is the operator already an additional insured? Primary wording has nothing to attach to without additional insured status. See blanket additional insured endorsements.
• Does the indemnity match? If the MSA is mutual knock-for-knock, primary wording on your policy should line up with the claims you agreed to take. If it is one-way, read the Chapter 127 limits.