Waiver of Subrogation Explained for General Contractors
What a waiver of subrogation actually does, why GCs require it from subs, how to verify it's on the policy, and what happens when it's missing.
TL;DR: A waiver of subrogation, granted on CGL via ISO endorsement CG 24 04, blocks the sub's insurer from pursuing the GC or owner after paying a claim the sub's work caused. Without CG 24 04 referenced on the COI, a cleanly-closed claim can spawn a subrogation lawsuit months later that drags the GC into court and breaks the project's shared insurance program, so GCs should verify the endorsement explicitly in the Description of Operations.
Waiver of subrogation is one of those insurance terms that sounds terrifying, shows up in every subcontractor agreement, and almost nobody. GCs or subs. Actually understands. Here's what it is, why it matters, and how to verify your subs' policies actually contain it.
What Is Subrogation?
Subrogation is the legal right of an insurance company to "step into the shoes" of its insured after paying a claim, and then recover that payment from whoever actually caused the loss.
Example: Your sub's employee causes a fire that damages the building. Your property insurer pays you the claim. Say, $500,000. Your insurer then turns around and sues the sub (or the sub's insurer) to recover that $500,000. That recovery action is subrogation.
From your insurer's perspective, subrogation is how they keep premiums reasonable: they recover from the party actually at fault rather than eating the loss. From the sub's perspective, it's a nightmare. They thought the claim was behind them, but now another insurance company is coming after them.
What Is a Waiver of Subrogation?
A waiver of subrogation is a contractual agreement where one party's insurer agrees in advance that it will not pursue subrogation against another specific party, even if that party caused or contributed to a loss.
In construction, the typical waiver flows like this:
The sub's general liability insurer waives its right to subrogate against the GC and the owner.
Translation: If the sub causes a loss that their insurer ends up paying for, the sub's insurer cannot turn around and go after you (the GC) to recover that payment.
Why GCs Require Waivers of Subrogation
Two reasons.
1. It Keeps Everyone Out of Court
Without waiver of subrogation, even the cleanest claim can spawn a second lawsuit months later when the sub's insurer decides to go after the GC or the owner. Those subrogation suits are costly, distracting, and damage the business relationship. Requiring a waiver shuts this down at the start.
2. It Protects the Project Insurance Program
On larger projects, you may have a builder's risk policy or a project-specific CGL program where the owner, GC, and all subs are covered under the same policy. Without cross-waivers of subrogation, one insured could sue another insured through their shared insurer. Which is messy, inefficient, and often explicitly prohibited by the policy anyway. Waivers align the paper with the reality.
The Form That Matters: CG 24 04
The ISO endorsement that grants waiver of subrogation on a Commercial General Liability policy is CG 24 04. "Waiver of Transfer of Rights of Recovery Against Others to Us." This is the form you should see referenced on a COI's Description of Operations alongside your Additional Insured language.
Like AI endorsements, CG 24 04 can be issued on a scheduled basis (specific party named) or a blanket basis (any party required by written contract). Blanket is more common today and is fine. Just make sure your subcontract requires waiver of subrogation so the blanket endorsement applies.
For Workers' Comp, there's a separate endorsement: WC 00 03 13. "Waiver of Our Right to Recover From Others." You want this too, because the biggest source of subrogation claims in construction is injured workers. If the sub's employee sues for a workplace injury, their WC insurer will often try to recover by going after whoever else might be liable, usually the GC. WC 00 03 13 shuts this down.
What's Actually on the Policy: Verify the Endorsement
This is the same lesson as Additional Insured verification: the COI is a summary, not a contract. If Description of Operations says "Waiver of Subrogation applies," that's a producer's statement, not proof that the endorsement exists.
To actually verify:
- Ask for the CG 24 04 and WC 00 03 13 endorsement pages. Request copies directly from the sub's producer.
- Confirm form edition dates. Older editions of CG 24 04 may have exclusions that more recent editions don't.
- Confirm the waiver applies to you. Blanket endorsements usually say "any person or organization for whom you are performing operations when required by a written contract." Make sure your subcontract actually requires waiver of subrogation so you're covered by the blanket language.
- File the endorsement with your sub records. Keep it stored with the COI for the duration of the project and the applicable statute of repose.
What Happens Without a Waiver
Here's a realistic example of why this matters.
A plumber (your sub) installs a fitting incorrectly. Six months later, the fitting leaks, causing $400,000 in water damage. The owner's property insurer pays the owner for the damage, then subrogates against the plumber's general liability carrier. Which pays the claim.
With waiver of subrogation: the plumber's carrier accepts the loss. Case closed. You're uninvolved.
Without waiver of subrogation: the plumber's carrier pays the owner, then turns around and files a second subrogation suit against you, the GC, arguing that your inspections or project management should have caught the faulty installation. Even if you ultimately win the second suit, you've spent $75,000 in legal fees defending it.
The waiver of subrogation is what prevents the second suit. It's a small line in an endorsement that saves you from a lot of downstream legal cost.
Common Mistakes
- Relying on COI language. "Waiver of Subrogation applies" on a COI is a statement, not a contract. You need the actual endorsement.
- Missing WC 00 03 13. GCs often get the CGL waiver and forget the WC waiver. Workers' comp claims are where the biggest subrogation suits come from. Get both.
- Subcontract doesn't require waiver. Blanket endorsements only kick in when a written contract requires the waiver. If your subcontract is silent, the blanket doesn't apply to you.
- Not renewing documentation. Each policy renewal is a new policy, and the endorsements reset. Verify waiver of subrogation at every renewal.
How PaperBoss Helps
PaperBoss collects COIs and their supporting endorsement documentation from every sub on every project. For waiver of subrogation specifically, PaperBoss lets you upload the CG 24 04 and WC 00 03 13 endorsement pages alongside the COI, flag which are received, and track when renewals need re-verification.
When a claim happens 18 months after the work is done, you want to pull up the endorsement that was active at the time of the loss. PaperBoss keeps that history permanently, searchable by sub, project, and date.
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Frequently Asked Questions
Is a waiver of subrogation required in all construction contracts?
No, but it's standard on most commercial subcontracts and required by AIA form documents (A201, A401 and related). For residential work, requirements vary. If you're unsure whether your subcontract should require it, talk to your construction attorney.
Does the waiver of subrogation cost the sub extra?
Usually minor. The endorsement itself is often free to add to a policy; some carriers charge a small fee ($25 to $100). In practice, the sub's producer can add the endorsement at no significant cost.
Does a waiver of subrogation affect my own insurance?
No. The waiver is on the sub's policy, not yours. You're the beneficiary, not the one giving up rights. Your insurance is unaffected.
Can I require waiver of subrogation for builder's risk as well?
Yes. In fact, most builder's risk policies and OCIP/CCIP programs contemplate mutual cross-waivers among all insured parties. Review your program documents to confirm.
What if the sub's policy won't grant waiver of subrogation?
Some insurers (particularly older or non-admitted carriers) refuse to attach the endorsement. If that's the case, you have three options: require the sub to switch to a carrier that will, negotiate a higher contract price to cover your added risk, or escalate to your construction attorney. Refusing is a red flag that the sub's coverage program is substandard overall.
This article is for educational purposes only and does not constitute legal or insurance advice. Consult a licensed construction insurance broker or attorney for guidance on your specific situation.
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