Insured Solutions
Insured Solutions

What is a waiver of subrogation?

A waiver of subrogation, commonly known as a WOS, is inserted as a contract clause that waives or 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. With so much litigation, it makes sense to have only one insurer liable for a loss.

As a protective measure, third-party vendors often request a WOS before they begin work with a subcontractor. This important contract clause releases the third-party vendor from insurance liability related to a claim or counter-claim should the carrier find the third party at fault.

For example, DelFoods is the third party that hires subcontractor ABC Construction to do work. ABC Construction may require that their workers’ compensation has a WOS that releases DelFoods from any liability if the insurance carrier thinks DelFoods is negligent in any way.

While a WOS can always be requested, there are often fees associated with adding this clause due to the additional risk the carrier takes on.