Restoration Insurance Tips: What is a Waiver of Subrogation

A few weeks ago we talked about additional insureds and how they affect your insurance coverage. In this post we want to discuss the Waiver of Subrogation.

A Waiver of Subgrogation is another common endorsement required on a large number of certificates of insurance. What it does, though, and why it is being requested is often not very well understood in the restoration industry.

What is a Waiver of Subrogation?

To understand what a waiver of subrogation is we need to first know what subrogation is. Subrogation is the process when an insurance companies pursues reimbursement from another insurance company for claims they paid.

For example, if one your workers is injured on a jobsite and it was another company’s negligence that caused the claim, then your workers compensation company may seek reimbursement from the other company’s general liability policy because it was their accident that caused the problem in the first place.

A Waiver of Subrogation prevents your insurance company from pursuing any type reimbursement in the event of a claim. This can be detrimental to both your restoration company and insurance company because the waiver is essentially sticking both of you on the cost of claims that may not necessarily be your fault.

We’re not saying you shouldn’t ever agree to adding the Waiver of Subrogation endorsements to your policies, but we do recommend talking with your agent about the potential claims and premium ramifications when adding the endorsement.