Man at construction site looking at clipboard with insurance requirements

What the heck is a Waiver of Subrogation?

January 27, 2023
Mordechai Kamenetsky

Okay, so you’ve been asked to provide a Certificate of Insurance (or COI). The business asking you to provide proof of coverage even provided you with a sample COI. It shows the limits and endorsements they require your policy to have that allow you to contract with them. While reviewing the sample COI, you may see an X in the box next to the requirement of a Waiver of Subrogation.

”Hmmm, does my policy have this endorsement? What does it even mean?” you wonder.

The simplest way to describe subrogation is as follows. 

For example, an employee is injured and a workers’ comp claim is filed through the employer's workers’ comp policy. The insurance company will pay the workers’ comp benefits, lost wages and medical bills of the injured employee. In this example, the total claim payout cost the insurance company $50,000. 

The right to subrogate would allow the insurance company to investigate the injury and to sue whichever party was at fault for the injury. This allows them to recover the $50,000 that was paid out for the claim. 

A waiver of subrogation endorsement on a workers’ comp policy means the insurance company is waiving their right to sue the at fault party in order to recoup their claim payout. Or in simpler terms, they are saying that they will not sue the people that caused the injury to happen.

When a business or building allows workers to work on their property, they can potentially be at fault if someone gets hurt. They do not want to be sued by the workers insurance company. Therefore, they require the insurance companies to promise that they will not come back and sue them in case someone gets hurt.

Blanket WOS vs. Specific WOS

There are two kinds of Waivers of Subrogation (WOS) endorsements. 

A blanket Waivers of Subrogation is when the insurance company applies the waiver to your policy and it applies to anyone that you work with. You do not need to get a specific waiver for each vendor or entity that requests one from you.

A specific WOS is where the insurance company will issue a WOS endorsement for a specific contract or job. It is created specifically for the new vendor or contract. These WOS endorsements can typically be added mid-term.

What is the cost of a Waiver of Subrogation endorsement?

There are various ways carriers price Waiver of Subrogation endorsements and some don’t charge at all. Some carriers charge a flat fee for both a specific or blanket Waiver of Subrogation. Others may charge a percentage of the total annual premium for a  blanket WOS endorsement. 

If you are being asked to buy a workers compensation policy that needs to include a waiver of subrogation endorsement visit get your instant quote today! 

Still not sure about all of this? Give us a call, we would love to hear from you!

Mordechai Kamenetsky

Mordechai Kamenetsky, co-founder and lead agent of Kickstand, is recognized as an expert in workers' compensation. He is passionate about helping small businesses manage risks and lower their workers' comp costs. In his articles, he educates readers and clients on the intricacies of workers' comp insurance.

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