What Is a Waiver of Subrogation? Definition, Examples and How It Works

On this page (10)

1. TL;DR
2. What does a waiver of subrogation mean?
3. Blanket vs specific waiver of subrogation
4. Which policies have a waiver of subrogation endorsement?
5. How does a waiver of subrogation appear in contracts?
6. Are workers’ comp waivers of subrogation allowed in every state?
7. How much does a waiver of subrogation cost?
8. How does a waiver of subrogation show up on a certificate of insurance?
9. How do COI reviewers check a waiver of subrogation?
10. FAQs

TL;DR

• A waiver of subrogation is an insurer's written agreement not to pursue a third party to recover money it paid on its insured's behalf, usually added to a policy by endorsement because a contract requires it.
• Specific waivers name each person or organization on a schedule. Blanket waivers apply to anyone the insured has agreed in a written contract to waive against, which suits contractors with many jobs.
• The standard endorsements are ISO CG 24 04 for general liability, ISO CA 04 44 for business auto and NCCI WC 00 03 13 for workers' compensation, with California using its own WC 04 03 06.
• Workers' comp waivers are state-regulated. Kentucky and New Hampshire bar contracts that require them, Missouri voids them for construction employers, and North Carolina and New York set premium charges for them.
• On an ACORD 25 certificate, a mark in the SUBR WVD column is not proof. The form itself says a certificate does not confer rights in place of the endorsement, so reviewers ask for the endorsement.

A waiver of subrogation is a promise, made in a contract and then written into an insurance policy by endorsement, that the insurer will not go after a particular third party to recover a claim it paid. IRMI defines it as an insurer’s written agreement to give up recovery against a responsible party, and notes that insurers usually grant it when the insured has already given up its own right to recover from that party. Construction contracts, commercial leases and vendor agreements ask for it so that a loss gets paid by insurance and stays paid, without the carrier suing one of the parties who signed the deal.

1. 1
   Owner or GCContract requires it

   The lease, subcontract or service agreement says the other party's GL, auto and WC policies must waive subrogation in its favor.

2. 2
   Insured and agentEndorsement requested

   The agent asks the carrier for a specific endorsement naming the party, or confirms a blanket form already on the policy.

3. 3
   CarrierEndorsement issued

   CG 24 04, CA 04 44, WC 00 03 13 or a carrier's own blanket form is attached, sometimes for an added premium.

4. 4
   AgentCertificate sent

   The ACORD 25 shows a mark in the SUBR WVD column, and the endorsement is attached or cited in the description box.

5. 5
   CarrierLoss paid, no recovery

   After paying a covered claim, the carrier does not pursue the protected party, even if that party caused the loss.

The waiver has to be agreed in the contract and on the policy before the loss. A certificate alone does not create it.

What does a waiver of subrogation mean?

Subrogation is the insurer’s right to step into its insured’s shoes after paying a claim and sue whoever caused the loss. In construction, the Third Circuit explained that a contract waiver assigns losses from contractor-caused property damage to the owner’s property insurer, so that insurer cannot turn around and sue the contractor. A waiver switches the recovery step off for the parties it names.

Example (made-up round numbers). A drywall subcontractor’s employee is injured on a project after the general contractor leaves a floor opening uncovered. The subcontractor’s workers’ comp insurer pays $120,000 in medical and wage benefits.

	Without a waiver	With a waiver naming the GC
Who pays the injured worker	Subcontractor’s WC insurer	Subcontractor’s WC insurer
Can that insurer sue the GC for the $120,000?	Yes, as subrogee	No
Where the loss ends up	Possibly on the GC’s liability policy after a lawsuit	Stays with the WC insurer
Effect on the subcontractor’s own record	Claim still counts against the subcontractor	Claim still counts against the subcontractor

The waiver does not reduce what the injured worker receives. It decides which insurer keeps the loss.

Blanket vs specific waiver of subrogation

There are two ways to write the endorsement. ERGO NEXT’s glossary describes the same split most carriers use:

	Specific (scheduled) waiver	Blanket (automatic) waiver
Who is protected	Each person or organization named on the endorsement schedule	Anyone the insured has agreed in a written contract to waive against
Adding a new client	New endorsement for each one	No change to the policy
Typical buyer	Businesses that need a waiver now and then	Contractors and vendors who sign many contracts that require it
Cost	Charged per waiver where a charge applies	Charged once per policy; can be higher than a single specific waiver
What a reviewer checks	Its own name is on the schedule, spelled as in the contract	The blanket wording reaches its contract (for example, “where required by written contract”)

North Carolina’s workers’ comp rule shows the pricing logic: the uniform charge NCRB adopted applies a specific waiver to the portion of manual premium where the waiver is used and a blanket waiver to total manual premium.

Which policies have a waiver of subrogation endorsement?

Contracts can ask for waivers on general liability, auto liability, workers’ comp and umbrella. The San Antonio Water System’s ACORD 25 instructions, for example, ask for waiver wording covering the automobile liability, commercial general liability, workers’ compensation and umbrella policies.

Line	Common form	What it does
General liability	ISO CG 24 04, Waiver of Transfer of Rights of Recovery Against Others to Us	Adds to the CGL’s Transfer of Rights of Recovery condition. The 05 09 edition waives recovery against the scheduled party for injury or damage arising out of the insured’s ongoing operations or “your work” done under a contract with that party (sample copy)
Business auto	ISO CA 04 44	Adds a waiver for auto liability against specified parties; it does not add additional insured status (Jones)
Workers’ comp	NCCI WC 00 03 13, Waiver of Our Right to Recover From Others	The carrier will not enforce its recovery right against the party named in the schedule. An optional sentence limits it to work done under a written contract that requires the waiver (NCRB copy)
Workers’ comp, California	WC 04 03 06, the California version	Requires the insured to keep payroll for the scheduled job separate, with the added premium stated as a percentage of the California premium on that payroll (sample copy)
Property (owner’s)	Contract clause, such as AIA A201	Owner and contractor waive rights against each other to the extent the loss is covered by property insurance

A waiver endorsement on its own does not make the other party an additional insured. Jones’s guide to CG 24 04 notes that it adds no additional insured coverage and no primary and noncontributory wording, which come from separate forms.

How does a waiver of subrogation appear in contracts?

The contract clause comes first, and the endorsement exists to back it up. In construction, the standard source is the property insurance article of the AIA A201 general conditions, where the owner and contractor waive all rights against each other for damage covered by property insurance.

Courts test those clauses when a large loss is paid:

• In St. Paul Fire & Marine v. Turner Construction (3rd Cir. 2009), the owner’s property insurer paid $5 million for water damage at the Cira Centre in Philadelphia after a subcontractor’s flow meter came loose, then sued Turner. The court affirmed judgment against the insurer because the AIA-style waiver covered losses to the extent covered by property insurance.
• In Liberty Mutual v. Fowlkes Plumbing (5th Cir. 2019), Liberty Mutual paid $4.3 million after a fire destroyed a Mississippi school during window restoration. The court said the meaning of the A201-2007 waiver in section 11.3.7 “has split courts nationwide” and certified the question to the Supreme Court of Mississippi.

The timing rule matters as much as the wording. IRMI notes that many policies exclude coverage if subrogation is waived after a loss, while waivers agreed before a loss generally leave coverage intact. WC 00 03 13 has an optional sentence for this, limiting the waiver to work done under a written contract that requires one.

Are workers’ comp waivers of subrogation allowed in every state?

No. Workers’ comp waivers are set by state statute and rating bureau rules. The states below were checked against their own statutes or bureau documents; other states have their own rules.

State	Rule	Source
Kentucky	Unlawful for an owner or employer to require another employer to waive its remedies under KRS 342.700 as a condition of a contract or purchase order. KEMI, a Kentucky workers’ comp carrier, says all WC waivers of subrogation are prohibited in Kentucky	KRS 342.700(3), KEMI
Missouri	A contract provision in which an employer in the construction group waives its subrogation rights in anticipation of a future injury is void as against public policy	RSMo 287.150
New Hampshire	Any agreement that requires employers or their carriers to waive subrogation rights under the comp law is prohibited	RSA 281-A:13, VI
North Carolina	Allowed, with a mandatory uniform premium charge in the voluntary and assigned risk markets	NCRB C-06-13
New York	Allowed, with charges set as ranges in the NYCIRB manual	NYCIRB R.C. 2183
California	Allowed on the state’s own form, WC 04 03 06	Sample endorsement

KEMI’s statement is broader than the statute’s text, which targets requiring a waiver as a condition of a contract. Agents writing Kentucky risks should read both and ask the carrier.

How much does a waiver of subrogation cost?

For workers’ comp, the answer depends on the state. North Carolina’s 2006 filing set the charge in its Basic Manual rule:

Because the charge sits inside the premium that the experience mod multiplies, an employer with a mod above 1.0 pays more for the waiver too. The experience modification rate guide covers how the mod is applied.

New York’s manual pages, as revised by NYCIRB bulletin R.C. 2183 in 2008, give carriers a range: 2% to 10% of manual premium for blanket coverage and 5% to 10% of manual premium for each named party on a specific waiver, each with a $250 minimum per policy. The California form leaves the percentage blank for the carrier to fill in.

For general liability and auto, no bureau sets the charge. Each carrier prices it, some include blanket waivers in contractor packages, and ERGO NEXT notes that the endorsement may raise the premium and that a blanket waiver may cost more than a specific one. Bureau figures above are dated, so check the current rule or the carrier’s filing before quoting a client.

How does a waiver of subrogation show up on a certificate of insurance?

The ACORD 25 Certificate of Liability Insurance has a SUBR WVD column next to the ADDL INSD column on each coverage line. The agent marks it for policies that carry a waiver. The 2016/03 edition of the form also prints this warning near the top:

If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s).

So the mark points to the endorsement and cannot stand in for it. Some certificate holders spell this out. SAWS tells contractors that the ADDL INSR and SUBR WVD columns alone do not meet its insurance specifications and asks for set waiver wording in the Description of Operations box, either blanket wording tied to a written contract or wording that names SAWS and the City of San Antonio. The City of Sierra Madre publishes sample CG 24 04 and WC 00 03 13 endorsements with the instruction to list the policy number referenced on the COI.

How do COI reviewers check a waiver of subrogation?

A reviewer checking a vendor or subcontractor file works through these questions, which match the checklist on Jones’s endorsement guides:

1. Does the contract require it, and on which lines? GL, auto, WC and umbrella are separate requirements.
2. Is SUBR WVD marked for each required line on the ACORD 25?
3. Is the endorsement attached? Check the form number, the policy number (it should match the certificate) and that the policy has not expired.
4. Does the wording reach your contract? A specific endorsement should name your entity as the contract does. A blanket endorsement should apply where a written contract requires a waiver, and your contract should say so.
5. Is the state a problem? For workers’ comp in Kentucky, Missouri (construction) or New Hampshire, the waiver may be unenforceable, and a reviewer should not reject a vendor for missing one there.
6. Is it a sample? Watch for “Sample” watermarks or blank schedules on endorsements sent as proof.

This is where COI tracking software earns its keep, since the certificate is easy to read and the endorsement is where the waiver lives. illumend says its AI reads every endorsement line by line and checks additional insured, waiver of subrogation and primary and non-contributory wording against the contract or lease. Jones publishes per-form guides for CG 24 04, CA 04 44 and WC 00 03 13 with a review checklist for each, and TrustLayer is another option on the same list. The best COI tracking software list compares six of these tools. Teams that build their own intake can start from the ACORD form extraction tools, and the policy summary prompts include a check for waiver endorsements.

FAQs

What does waiver of subrogation mean in simple terms?

It means your insurer agrees in writing that after it pays a claim, it will not sue a particular other party to get that money back, even if that party caused the loss. Contracts ask for it so that a loss on a job or in a building is paid by insurance instead of turning into a lawsuit between the people who signed the contract.

What is an example of a waiver of subrogation?

A subcontractor's employee is hurt on a site because of the general contractor's mistake. The subcontractor's workers' comp insurer pays the claim. Without a waiver, that insurer could sue the general contractor to recover what it paid. If the subcontract required a waiver and the policy carries a WC 00 03 13 endorsement naming the general contractor, the insurer gives up that recovery.

What is the difference between a blanket and a specific waiver of subrogation?

A specific waiver lists each protected person or organization on the endorsement schedule, so a new client means a new endorsement. A blanket waiver applies automatically to anyone the insured has agreed in a written contract to waive against. Blanket forms are easier to administer and can cost more.

Does a waiver of subrogation cost extra?

Often, yes. On workers' comp some states set the charge: North Carolina adopted 5% of the applicable manual premium for a specific waiver and 2% of total manual premium for a blanket waiver, each with a $100 minimum, and New York's rating board manual sets ranges of 2% to 10%. For general liability and auto the charge is set by each carrier.

Is a waiver of subrogation the same as additional insured status?

No. Additional insured status gives the other party coverage under your policy. A waiver of subrogation stops your insurer from suing them after it pays a claim. Contracts often require both, and they are added by different endorsements, so a reviewer checks for each one separately.

Can a waiver of subrogation be added after a loss?

Generally not without risk. IRMI notes that many policies exclude coverage if the insured waives subrogation after a loss, while waivers agreed before a loss generally do not affect coverage. The standard workers' comp endorsement can also limit the waiver to work done under a written contract that requires it.

Is a checked SUBR WVD box on a certificate of insurance enough?

No. The ACORD 25 says that if subrogation is waived, certain policies may require an endorsement, and that a statement on the certificate does not confer rights to the certificate holder in place of that endorsement. Contract compliance teams ask for a copy of the endorsement and check that it names them or uses blanket wording that covers their contract.