WAIVERS OF SUBROGATION
Many contracts, including lease agreements, contain provisions
for one party to waive its rights of recovery against another.
Such provisions are commonly known as "waivers of subrogation."
Many, but not all, property and general liability policies
allow an insured to waive his/her rights of subrogation as
long it is done in writing and prior to a loss. In the areas
of Inland Marine, Ocean Marine, and Workers Compensation insurance,
you must have the carrier's permission to do this without
jeopardizing your coverage.
The implementation of waivers of subrogation can be an excellent
risk management technique, but the following rules should
be followed:
- Rights of subrogation should be waived only to the extent
that there is insurance recovery.
- The best waivers are usually mutual waivers that benefit
both parties.
Keep in mind, however, that this is a complex subject and
you should not implement any waiver of subrogation until your
insurance representative has confirmed that the pertinent coverages
will still be there to operate to your benefit when needed.
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