A waiver of subrogation is a contractual provision that prohibits an insurer from seeking redress from a negligent third party. Subrogation insurance is when an insurance company, after paying a loss, inherits the right to recoup its payment from another party, if that party is also responsible for the loss. A waiver of subrogation is a provision that prohibits an insurer from pursuing a third party to recover damages for covered losses.
Waivers of subrogation are found in various contracts, including construction contracts, leases, and auto insurance policies. They are intended to preserve the relationship between the two parties to the contract and keep them from having to engage in costly litigation. A waiver of subrogation is common in the construction and real estate industries, where parties may want to include it to cut down on the possibility of drawn-out and costly legal disputes that can arise from contractual obligations.
A mutual waiver of subrogation means that the protection runs both ways, and the other party in a contract will not be able to sue you if you are at fault or partially at fault for an injury or damage. However, it is essential to remember that you should never sign a contract that includes a waiver of subrogation without first talking to your insurance company.
In summary, a waiver of subrogation is a legal endorsement that prevents an insurer from recovering the money theyve paid out on a claim from a negligent third party. It is a contractual provision that prohibits an insurer from pursuing a third party to recover damages for covered losses. Waivers of subrogation are found in various contracts, including construction contracts, leases, and auto insurance policies. They are intended to preserve the relationship between the two parties to the contract and keep them from having to engage in costly litigation.
