Glossary
Subrogation waiver, defined
An endorsement under which a carrier agrees in advance not to pursue a named party for money it pays on a claim, even if that party caused the loss. It is most often attached to a workers compensation policy at a customer's request, so the carrier cannot recover benefits paid to an injured worker from the customer on whose site the worker was hurt.
In practice
From the carrier's side, giving up the recovery right has a cost, so the endorsement is priced: a small surcharge on the affected policy, sometimes on a blanket basis for anyone the insured has agreed in writing to protect, sometimes scheduled party by party. From the insured's side it is nearly always a contractual obligation rather than a choice; the general contractor, landlord or client demands it, the certificate must show it, and the job does not start until it does. Not every carrier offers a blanket version, and monopolistic state funds have their own rules, so the endorsement should be confirmed before signing a contract that requires it. The analysis checks each contract's insurance section against what the policy actually carries.
A worked example
Suppose a subcontractor's employee is injured on a general contractor's site because of a scaffold the general contractor built badly. The subcontractor's workers compensation carrier pays $80,000 in benefits. Without the endorsement it would sue the general contractor to recover the $80,000. With the endorsement in favour of the general contractor, it cannot; the loss stays with the subcontractor's carrier and, over time, in the subcontractor's experience modification rate. Hypothetical figures.
Applies to: Workers' Compensation Insurance