Glossary

Primary and noncontributory is a term commonly used in contract insurance requirements to stipulate the order in which multiple policies triggered by the same loss are to respond. For example, a contractor may be required to provide liability insurance that is primary and noncontributory. This means that the contractor's policy must pay before other applicable policies (primary) and without seeking contribution from other policies that also claim to be primary (noncontributory).

The primary beneficiary is the beneficiary named as being first to receive proceeds or benefits when they come due or are payable.

Primary cover refers to the policy that responds first to an insured loss, either on a first-dollar basis or after allowing for a deductible.

As respects professional liability coverage for contractors, primary liability refers to the direct performance of design and other professional services conducted by in-house employees.

Primary payer refers to an insurance policy that pays first when a person is covered by more than one insurance plan (usually associated with health insurance).

In a surety bond, the entity whose performance is being guaranteed—the obligor—is also referred to as the principal.

The principal sum is the amount payable in one sum in the event of accidental death and, in some cases, accidental dismemberment.

Principle of indemnification is the basis of insurance, providing that a loss payment will replace what is lost, putting the insured back to where it was financially prior to the loss without rewarding or penalizing the insured for its loss.

The priority of payments provision refers to a provision found within most, but not all, directors and officers (D&O) liability insurance policies that sets forth the order in which policy proceeds will be paid out to the various insureds under the policy.

Prior acts coverage is a feature of claims-made policies that have either no retroactive date or a retroactive date earlier than the inception date of the policy.