Waiver of subrogation
A waiver of subrogation is a contract term under which an insured gives up, or limits, the insurer's right to recover from a responsible third party after a covered loss. It allocates recovery risk for the described work or property; it does not create insured status or expand the policy.
Waiver of subrogation is a contract allocation of recovery rights. After an insurer pays a covered loss, subrogation ordinarily lets the insurer pursue the party responsible for that loss. A waiver limits that pursuit for the scope the parties actually described.
What the clause changes
The practical question is not whether the words appear somewhere in a contract. It is which loss, work, property, and parties the words reach. In State Farm Insurance Co. v. J.P. Spano Construction, the New York court treated a waiver as a negotiated allocation of risk through insurance and read it strictly in its stated context. A later New York decision likewise cautioned against extending a lease-related waiver to losses outside the clause’s described scope.
That makes the term a liability-allocation issue. A contractor may still face an owner’s claim for alleged defective work, property damage, or bodily injury; the waiver addresses whether the paying insurer can seek reimbursement from a contracting party afterward. The contract’s wording and governing law matter more than the heading used for the provision.
What a certificate does not prove
A waiver of subrogation is not the same as additional-insured status, primary-and-noncontributory wording, or a certificate of insurance. The DFS-hosted ACORD 25 form states that a certificate entry about waived subrogation does not confer rights in place of a policy endorsement and does not amend the policy. The file should therefore identify the required endorsement, the applicable policy, and the operations covered—not just a checkbox supplied before mobilization.
For the certificate and policy mechanics, see the sister library’s client insurance requirements guide. Pleasedon’tsue’s certificate question covers the separate evidence problem.
The PDS review
Read the waiver beside the indemnity, insurance, and damage provisions. Ask: whose insurer is giving up recovery, for which operations, against whom, and whether the policy actually contains the required endorsement. If those answers are missing, treat the clause as an unresolved contract exposure rather than proof that someone else will absorb the loss.
Sources
- Primary source: New York Courts — State Farm Insurance Co. v. J.P. Spano Construction, Inc. — Explains subrogation, contractual waiver, allocation of risk through insurance, and strict construction of the clause's context.
- Primary source: New York Courts — American Scientific Lighting Corp. v. Hamilton Plaza Associates — Applies the contextual reading of a subrogation waiver in a commercial lease dispute.
- Primary source: New York Department of Financial Services — ACORD 25 Certificate of Liability Insurance — Officially hosted form warns that a certificate statement about a waived subrogation does not replace a policy endorsement or amend the policy.