Waiver of Subrogation Explained for Contractors
A waiver of subrogation stops a subcontractor's insurance company from suing you to get back money it paid on a claim. It is one of the most common requirements in a subcontract, and one of the most often missed.
What subrogation means
When an insurer pays a claim, it steps into the shoes of the person it paid and can try to recover the money from whoever caused the loss. That right is called subrogation. Without a waiver, if a sub's worker is hurt on your job and the sub's workers' comp insurer pays, that insurer could come after you if it believes your site conditions caused the injury.
What the waiver does
A waiver of subrogation is a promise, made in the contract and added to the policy by an endorsement, that the insurer will not pursue you. The loss stays with the insurance that was meant to cover it, instead of turning into a lawsuit between the companies on your job.
Where contractors usually require it
- Workers' compensation. The most important one for general contractors, since injuries are the most common claim.
- General liability. Usually alongside additional insured status.
- Commercial auto and umbrella, on larger or higher-risk jobs.
How to check it
- Put the requirement in your subcontract, naming the policies it applies to.
- On the ACORD 25 certificate, look for a "Y" in the SUBR WVD column on each of those policies.
- Ask for the waiver of subrogation endorsement itself. Some policies include a blanket waiver "where required by written contract", which works only if your contract actually requires it.
Does it cost the sub anything?
Often a little. Workers' comp insurers commonly charge a small percentage of premium for a specific or blanket waiver, while many general liability policies include a blanket waiver at no extra charge. Tell subs up front so it is in their price.
This guide is general information, not insurance or legal advice. Rules vary by state, and a few states limit waivers on workers' compensation.