Waiving a Liability Insurer’s Right to Subrogation—Is It Appropriate?
An increasingly common source of delay and confusion seems to be whether a contracting party will, or even can, waive its liability insurer’s subrogation rights against the other party, especially when the latter is required to be listed as an additional insured on the first party’s liability insurance policy. At best, confusion in this area can gum up the works during negotiations and slow things down. At worst, it can lead to very unpleasant surprises down the road.
December 06, 2024 at 12:59 PM
8 minute read
By John G. Koch
When it comes to negotiating the insurance and risk-shifting terms of any garden variety business contract, the oft-used but rarely understood—or vaguely understood—“waiver of subrogation” arguably takes the lead for provisions that unnecessarily slow things down and engender confusion. An increasingly common source of delay and confusion seems to be whether a contracting party will, or even can, waive its liability insurer’s subrogation rights against the other party, especially when the latter is required to be listed as an additional insured on the first party’s liability insurance policy. At best, confusion in this area can gum up the works during negotiations and slow things down. At worst, it can lead to very unpleasant surprises down the road.
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