Do Waivers of Subrogation Go on General Liability Insurance?

Waivers of subrogation are commonly included in general liability insurance policies either by being directly part of the policy form or added as an endorsement to the policy. In addition to the waiver of subrogation, general liability policies may also include a third party as an additional insured, which will automatically preclude the insurer from subrogating. The waiver functions differently from the granting of additional insured status in that it explicitly waives any subrogation rights.

  1. What is Subrogation?

    • Insurance policies protect their insured by paying claims and legal defense expenses on their behalf. In certain circumstances when the insured may not be fully at fault for a claim, the insurance policy will still indemnify the insured and subsequently seek reimbursement from another responsible party. The process of seeking of reimbursement is known as subrogation. Insurance policies generally contain a provision that ensures the right of the policy to seek reimbursement for paid claims and also requires the insured to cooperate in the process.

    Waiver of Subrogation

    • Parties to a contractual relationship commonly require one another to waive claims against each other for damages or injuries that may arise out of the performance of the contractual duties. The parties may agree to the waiver because they are relying on their own insurance to cover any injuries or damages. Each party must also require its insurance policy waive subrogation against the other party. Without taking the step of securing waivers of subrogation on the insurance policies, the parties are still potentially exposed to claims.

    General Liability - Waiver of Subrogation

    • The standard commercial general liability policy produced by the Insurance Services Office, or ISO, provides for an automatic waiver of subrogation as long as the insured has contractually done so prior to a loss. To further clarify the waiver of subrogation, there is a standard policy endorsement -- the CG2404 Waiver of Transfer of Rights of Recovery Against Others to Us -- which can be added to the policy and provided to a third party as evidence of the policy’s agreement to waive subrogation.

    General Liability - Additional Insured

    • In addition to the waiver of subrogation, two parties engaged in a contractual relationship may also require one party to name the other party as an additional insured on the general liability policy. As an additional insured, the named party is afforded the benefits of the other party’s insurance policy in the event of a claim. The additional insured is also automatically the beneficiary of a waiver of subrogation because liability insurance policies may not subrogate against their insured.

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