Waiver of Subrogation

Overview

A Waiver of Subrogation is an endorsement on an insurance policy in which the insurer gives up its right to pursue a third party for reimbursement after paying a claim. This is a critical protection commonly required in commercial contracts.

What Is Subrogation?

When an insurance company pays a claim, it often has the legal right to "step into the shoes" of the insured and seek reimbursement from the party that caused the loss. This is called subrogation. For example, if Vendor A's employee damages property owned by Company B, and Vendor A's insurer pays the claim, the insurer could then sue Company B to recover its costs — even if Company B was only partially at fault.

Why Waivers Matter

A Waiver of Subrogation prevents this scenario. By requiring your vendors to carry a Waiver of Subrogation endorsement in your favor, you protect yourself from being sued by the vendor's insurance company after a claim.

Without this waiver, you could find yourself in the paradoxical situation of being both protected by the vendor's insurance (as an Additional Insured) and sued by the vendor's insurer (through subrogation).

Where to Find It on a COI

The Waiver of Subrogation is typically noted in the Description of Operations section of the ACORD 25 form. Look for language such as: "Waiver of Subrogation applies in favor of [your company name] as required by written contract."

Some certificates also check a "Waiver of Subrogation" box in the coverage grid, though the Description of Operations is the more reliable indicator.

Example

A general contractor hires an electrical subcontractor and requires a Waiver of Subrogation on the sub's General Liability and Workers' Compensation policies. If the sub's employee is injured on the job and the sub's Workers' Comp insurer pays the claim, the insurer cannot turn around and sue the general contractor for reimbursement.