Insured Solutions
Insured Solutions

What is a waiver of subrogation?

Contractors seeking to do business with large corporate entities - predominately in Construction trades - pay for this Work Comp policy inclusion which releases the customer of the contractor from liability due to customer employees' and/or other worksite (third party) contractors negligence leading to, contributing to, or causing injury to employee(s) of the contractor providing the waiver. It is akin to a "Hold Harmless" clause where customer insurers are not liable for employee mistakes that lead to a contractor employee injury meaning the Work Comp provider of the contractor is solely responsible for covered employee injuries with no third-party recourse.

A waiver of subrogation, commonly known as a WOS, is inserted as a contract clause that releases the right of an insurer to sue a third party.

Waivers are intended to minimize lawsuits and to protect companies that hire contractors or subcontractors.

Contractors that work with large companies - mostly in construction - typically get a workers' comp waiver of subrogation that releases the customer of the contractor from liability due to the customer's employees' or a third party conractor's action (or inaction) that leads to an injury of the contractor's employee. So, if someone is injured on the job site, the contractor is liable for the workers' comp injury and cannot go after a third party for compensation.

While a WOS can always be requested by the contracting company, there are often fees associated with adding this clause to the contractor's policy due to the additional risk the carrier takes on.