What is a Waiver of Subrogation?
Learn why hiring parties require Waivers of Subrogation across General Liability, Auto Liability, and Workers’ Compensation.
A Waiver of Subrogation is an agreement wherein an insurance carrier relinquishes its right to seek financial recovery from a negligent third party after covering a loss. In construction agreements, it prevents the subcontractor’s insurer from suing the hiring general contractor or project owner.
Why Contractors Require This Endorsement
Eliminates Cross-Lawsuits
Keeps the financial burden of claims contained within the trade contractor’s policy rather than creating litigation between project partners.
Protects Experience Mods
Prevents workers’ compensation subrogation claims from driving up the general contractor’s insurance modification rate (EMR).
Blanket vs. Scheduled Waivers of Subrogation
Waivers of subrogation typically come in two forms depending on the requirements of the project and the subcontractor's policy structure:
- Blanket Waiver of Subrogation: Automatically applies the waiver to any entity the subcontractor has agreed to waive subrogation against in a written contract prior to the loss. This is standard for most commercial trade contractors as it avoids paying a fee for every new job.
- Scheduled Waiver of Subrogation (Specific): The waiver only applies to the specific entity or project explicitly named on the endorsement schedule. This requires manual processing by the broker and often incurs a per-project fee.
Common Forms and Endorsements
When verifying a Certificate of Insurance, compliance teams should look for specific endorsement language attached to the ACORD 25:
- CG 24 04: The standard ISO endorsement for Waiver of Transfer of Rights of Recovery Against Others to Us (General Liability).
- WC 00 03 13: The standard NCCI endorsement for Workers' Compensation Waiver of Our Right to Recover from Others.
Simply checking the "WVD" box on an ACORD 25 is not legally binding. The actual endorsement schedule must be reviewed to ensure the waiver is active.
Comparing Waiver of Subrogation vs Primary & Non-Contributory?
Understand how both endorsements work together to secure risk transfer.