Are you being asked to include a waiver of subrogation in a contract with a job partner, service provider, or contractor?
These waivers are common nowadays, but they must be coordinated with your insurance policy. If you are requesting one from a business you are working with, see to it that both your contract with that entity and its contract with its insurer are aligned.
A subrogation waiver is a kind of indemnity clause that prevents the insurer of a claimant from going after the at-fault party. Where an approved waiver of subrogation exists, the claimant would file for recompense from its insurer after a covered event and be paid based on its insurance policy terms, and that would be the end of the claim. It’s an important protection in many business contracts that ensures legal and insurance proceedings won’t go on for extended periods after an incident. Many subcontractors insist upon the clause in their contracts.
But some insurance policies bar such waivers, in which case, the waiver is meaningless even if inserted in a contract. In other cases, the policy is silent on the matter. That’s why you must align your insurance coverage with your business contracts. For liability insurance, you may be able to choose from scheduled coverage, under which you stipulate what parties fall under the waiver, or blanket coverage, which broadly covers any party with whom you agree to waive subrogation rights.
In most cases, insurers allow subrogation waivers, though many apply an upcharge for the privilege. It’s largely considered worth the cost, but talk to your agent or broker about the specifics to make sure you are getting the right fit for your company’s situation.
