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Waiver of Subrogation

What Is a Waiver of Subrogation?

A waiver of subrogation is an endorsement that says the insurance company can’t seek compensation for claims from the third party responsible for the damages. 

For example, let’s say you make a property damage claim because you had a grease fire in your food truck that burned part of a nearby building. Upon investigation, you learn that the grease trap was faulty and caused the fire.

In this example, the waiver of subrogation endorsement prevents your insurance company from pursuing compensation from the grease trap manufacturer.

Waiver of subrogation definition.

How Does a Waiver of Subrogation Work?

To define waiver of subrogation, you first need to understand what “subrogation” is.

Subrogation is when your insurance company inherits your right to recoup claim payments or losses from the third party responsible for the loss. If your insurance pays on a claim, they can then pursue the negligent person or business that actually caused the loss.

However, if your policy includes a waiver of subrogation endorsement, neither you nor your insurance company can seek repayment from the negligent party.

Pros and Cons of a Waiver of Subrogation

One of the pros of adding a waiver of subrogation to your policy is that it can eliminate potential conflicts between you and your partners. This can safeguard them from getting sued by your insurance company for damages.

The con is that it reduces your insurance carrier’s ability to recoup losses that they could otherwise recover. Additionally, your premium will go up if you need to add the waiver of subrogation. This is to offset the additional financial risk for the insurer.

Do I Need a Waiver of Subrogation?

Most waivers of subrogations are required by contract, so unless a partner requires it, you do not need to add one to your policy.

How to Get a Waiver of Subrogation

To obtain a waiver of subrogation, you will need to contact our experts at 1.844.520.6992. They will assist you in adding it to your policy.

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