Short answer
A waiver of subrogation is your insurer's agreement that, after paying a claim, it will not try to recover that money from a party you agreed in a contract not to pursue, such as a shipper or broker. IRMI defines it as an acknowledgment by an insurer that it has no right to subrogate against a liable third party after it has paid a loss on behalf of its insured. On auto policies it is added by endorsement, such as ISO's CA 04 44.
- It matters because if you sign a contract waiving recovery and your policy does not allow it, you can create a coverage problem for yourself.
Subrogation, in one example
Your truck is damaged at a shipper's facility because the shipper's forklift operator hit it. Your physical damage insurer pays to repair the truck, then normally steps into your shoes and seeks repayment from the shipper. That is subrogation.
If your contract with the shipper says you waive recovery against it, and your policy carries a matching waiver, your insurer pays and does not pursue the shipper. Shippers and brokers ask for this so that a claim paid by your insurer does not come back to them.
Why the policy has to match the contract
IRMI explains that policies generally allow an insured to waive recovery rights before a loss, but many restrict waivers made after a loss. The waiver endorsement confirms the insurer accepts what you agreed to. ISO's CA 04 44 applies to parties listed in its schedule and modifies the business auto, motor carrier, and auto dealers forms, covering both liability and physical damage recoveries. Many insurers also offer blanket versions that apply when a written contract requires the waiver.
Check every line the contract names. A shipper agreement may ask for a waiver on auto, general liability, and workers comp. Each policy needs its own endorsement, and some insurers charge for them.
What to look for before you sign
- Which policies does the contract require a waiver on?
- Is the waiver tied to a written contract signed before the loss?
- Is it scheduled (names each party) or blanket?
- Does the contract also require primary and non-contributory or additional insured status?
The insurance language usually sits next to an indemnity clause. That clause decides who owes whom, and it belongs in front of an attorney. See broker-carrier agreement requirements.
Common questions
Does a waiver of subrogation cost extra?
Sometimes. Some insurers charge per scheduled party, others include a blanket waiver. Ask before the contract is signed.
Can I sign a waiver after an accident?
Be careful. IRMI notes many policies restrict waivers made after a loss, because that would hurt the insurer's recovery rights. Talk to your agent before agreeing to anything post-loss.
Is a waiver the same as being an additional insured?
No. An additional insured has coverage under your policy. A waiver only stops your insurer from pursuing that party after paying your claim.
Sources
- IRMI glossary: waiver of subrogation. Definition; pre-loss vs post-loss waivers.
- IRMI: waiver of subrogation. Definition and how the waiver endorsement works.
This page explains insurance, not law. Have your attorney review indemnity and contract language; our job is making the insurance match it.
Keep reading
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