A general contractor asks that a subcontractor’s certificate of insurance say “general liability policy is primary and non-contributory (P/NC)” and “no residential construction exclusions are included within the general liability policy.”

The CG 00 01 form is primary, but the contractor asks for the CG 20 10 form, which the carrier offers on a primary basis. The contractor also asks for the CG 20 37, which the carrier also offers but which does not include P/NC language.

In addition, the agent sent the schedule of forms to address the residential construction requirement, and there are not any exclusions.

Q: "1) What is the suggested verbiage on the COI according to the contractor’s requests?

Can we state that the general liability policy is P/NC, then just attach the forms so the builder is responsible to address the lack of P/NC on the CG 20 37?

2) Can I state on the COI that there are not any exclusions? The contractor will not accept the policy forms to meet this requirement and is threatening to hold our client's check."

A: “We recommend limiting the text on a COI according to what the ACORD Forms Instruction Guide (FIG) calls for. The COI holder often wants all kinds of information about P/NC, waiver of subrogation and more under description of operations, or elsewhere on the form. The COI is a limited overview of basic coverages and limits; the FIG does not specify that the COI must provide this extraneous information.

The reality is that when you have two contractors general liability policies, the only way to know for sure whether they are primary, excess, pro rata or the like is to review both policies. You can’t be certain that your insured's policy is primary unless the COI holder allows you to review their policy as well. Since they're concerned about this, it's better that you provide your insured's policy and let them do the comparison on their own.

We also recommend that you do not include language on the COI that the policies themselves do not reflect. The ISO CGL has no ‘residential construction exclusions’ per se, but it has a lot of exclusions that can apply to residential construction exposures. If you say there are no such exclusions, that's simply a vague comment open to interpretation. We know the contractor is concerned about carriers’ specific exclusions regarding residential construction, but the way to respond to that is providing a copy of said exclusionary endorsements.

The bottom line: You can put anything you want on a COI, as long as it does not explicitly violate any laws related to COIs, and as long as it is not a misrepresentation or fraudulent statement. The problem is, when you start adding broad, vague language that does not reflect the language in the actual policy forms, you can be subject to an allegation of misrepresentation or fraud.”

Bill Wilson is director of the Big “I” Virtual University.

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