SUBROGATION WAIVER CLAUSE

Standard commercial construction contract forms typically contain subrogation waiver clauses to protect the contractor from being sued by the project owner’s property insurance carriers in the event of a fire or other catastrophic jobsite loss. Contractors even with little or no role in the loss are often targeted by these insurance carriers attempting to recoup their own policy losses. 

Having a subrogation waiver clause in your contract means the difference between your being paid to rebuild the project under a change order paid for by the owner’s insurance, and your being thrown off the job and subjected to lengthy litigation, very possibly including claims in excess of your own policy limits.   

The following is an example of a typical subrogation waiver clause.  Such a clause  should be included in any contract with a project owner:

Subrogation Waiver: All parties to this contract waive their rights against each other for any damages caused by fire or other peril covered by any property insurance.  This waiver of subrogation shall be effective as to a person or entity even though that person or entity would otherwise have a duty of indemnification, contractual or otherwise.

If you have any questions about using subrogation waiver clauses in your contracts, please contact your attorney.