What is a Waiver of Subrogation?

What is a Waiver of Subrogation and how does it affect my insurance policy?

California small business owners have most likely run over the term waiver of subrogation while reviewing insurance requirements from clients. Since it is commonly requested by clients for many jobs and projects, this endorsement is something every California business owner should be aware of and even possibly add to their own commercial insurance quote(s) or policy(s). Let’s discuss what this endorsement means and why you may need it.

What it means to Subrogate

Subrogation, put simply, means an insurance company has the right to pursue coverage from a third party responsible for a loss to their insured. In other words, if a claim is partially your fault and partially another party’s fault, your insurance company has the right to recover losses from the other party or their insurance carrier. For example, when an insurance company pays for a loss on behalf of their client, they have the right to seek reimbursement from the other, at-fault, party. A familiar case of subrogation occurs when an auto insurance company covers the damages of their insured’s car that was hit by another driver and now the insurance company can pursue the at-fault driver’s insurance company for financial repayment. This same action can be applied to California commercial insurance policies such as general liability and workers compensation quotes or policies.

Why Waive the Right to Subrogate?

Many of your clients will request that you waive this right to give them peace of mind that they will not be liable for any losses that might arise from your work or service. They may also be requesting the endorsement to protect them from any loss where they are partially at-fault. By waiving this right, you are essentially taking full responsibility should any claim occur.

How to obtain a Waiver of Subrogation Endorsement

If a waiver of subrogation is something a client is requesting from you or something you would like in the event of a possible request, you can add the endorsement onto your California insurance quote(s) or policy(s) at any time through your broker. An agent will go over the quote options that are available through your California insurance carrier, as you can obtain a blanket waiver of subrogation that will suffice for any and all clients requiring this waiver, or a specific waiver of subrogation which names each client requiring a waiver of subrogation from you. Your needs will be met by an insurance quote or policy to deliver exactly what you need to your clients so you can provide quality and efficient service.