what is a waiver of subrogation 
a waiver of subrogation is a contractual provision whereby an insured waives the right of their insurance carrier to seek redress or seek compensation for losses from a negligent third party typically insurers charge an additional fee for a waiver of subrogation endorsement many construction contracts and leases include a waiver of subrogation clause such provisions prevent one party s insurance carrier from pursuing a claim against the other contractual party in an attempt to recover money paid by the insurance company to the insured or to a third party to resolve a covered claim understanding a waiver of subrogationa right of subrogation allows an insurer to stand in proxy for its insured after satisfying a claim paid to the insured per the company s duties under the insurance policy the insurance company may pursue a claim against other parties to cover its costs for that same loss even when the loss involves a resolution of claims brought against the insured in other words if subrogation is waived the insurance company cannot step into the client s shoes once a claim has been settled and sue the other party to recoup their losses thus if subrogation is waived the insurer is exposed to greater risk insurance companies frequently charge an additional fee on top of the premium to include a waiver of subrogation clause parties to the contract avoid litigation and the insurance company bears the loss types of waiver of subrogationa 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 auto insurance policies and more sometimes construction contracts contain a waiver of subrogation clause in these clauses the owner waives all rights to sue third parties such as contractors and subcontractors for damages caused by perils covered in the owner s insurance policy under this provision the owner s insurer also agrees that they will pay covered losses and will not seek to recoup these losses from the negligent party the waiver of subrogation clauses has exceptions if the owner s property insurance does not insure against a specific risk the owner may seek recovery from the responsible party also if the loss exceeds the insurance policy s limit the owner may pursue the responsible party 1waiver of subrogation clauses in lease contracts function similarly the insurer cannot stand in proxy for the owner to recover damages if the injured party s insurance covers the claim it must be paid and no further action against the third party may occur these clauses protect the landlord and tenant from expensive litigation costs and interruptions to the terms of the contract subrogation of waiver clauses can also help preserve amicable relationships between landlords and tenants 