Waiver of Subrogation: Value vs Risk

A waiver of subrogation clause is placed on a contract to minimize the lawsuits and claims between the parties. The risk, once assigned to the insured parties stops there, without allowing the insurance company to go after any third parties. This guarantees that if the loss occurs, the owner’s insurance pays the claim without having to determine who was at fault. Without a waiver of subrogation, litigation arbitration is frequently needed leading to long and costly delays.

Now there are two risks to keep in mind when looking at waivers of subrogation. In some jurisdictions, waivers of subrogation are not available. Therefore, a careful review of the state statute is required. You should also obtain your workers’ compensation carrier’s agreement and position on this clause. Waivers of subrogation requirements should be built into the contract.

The contract wording should be carefully reviewed to ensure that the waiver is being used appropriately for the situation. For example, mutual waivers may be beneficial in landlord-tenant contracts, where all parties waive their rights. However, in construction contracts, mutual waivers may not be accepted or prudent. It’s important that all contractual language mirrors your policy.

Want a quote?

Our team is ready to help you save precious time, aggravation, and hard earned money! Start the process at the bottom of this page, or by clicking the button below!

Call Email Certificate Request Blog
Skip to content