Subrogation in one example
Your crew damages a sprinkler head at a client's building. Your general liability insurer pays the client's repair. If the client's own property insurer had paid instead, that insurer could step into the client's shoes and sue you to recover. Each party's contract tries to settle in advance whose insurer bears what, and waivers are how.
What the waiver does
With a waiver of subrogation in favour of the client on your policy, your insurer agrees not to pursue the client after paying a claim arising from your work. The client's lease or contract usually asks for the mirror image too, so both insurers stay out of court with each other and the parties' relationship survives the loss.
Where contracts require it
- Leases: on liability, property and workers' compensation, in favour of the landlord.
- Construction subcontracts: on general liability, auto and workers' compensation, in favour of the GC and owner.
- Vendor and service agreements: on general liability and workers' compensation, in favour of the client.
- Property management agreements: on everything, in favour of owner and manager.
Workers' compensation waivers
Workers' compensation insurers recover from third parties when an employee's injury was caused by someone else, such as a general contractor's crew. A waiver on the workers' compensation policy stops that recovery against the named party. It is a separate endorsement with its own charge, and it is the one most often missing when a GC rejects a certificate.
Blanket versus scheduled
A blanket waiver applies to any party you are required by written contract to waive against, which means every new contract is covered automatically. A scheduled waiver names one party and must be amended for each new one. Businesses that sign contracts regularly should carry blanket forms on each policy.
How to check yours
The forms and endorsements list on each declarations page. Look for a waiver of subrogation or "waiver of transfer of rights of recovery" form, and read whether it is blanket or scheduled. If a contract requires it on three policies, you should find three forms.