Waiver of Subrogation
Under a waiver of subrogation, the insurer waives its right to recover a paid loss from specified third parties – for example group companies, tenants or contract partners.
- Clause type
- Extension
- Origin/Market
- Swiss market
- Favours
- Insured
- Negotiability
- Negotiable
Purpose
When the insurer pays, the insured’s recovery claims against third parties who caused the loss pass to the insurer by operation of law (subrogation). In close business relationships – corporate groups, lease and construction arrangements, operator consortia – this recourse is often unwanted because it economically hits the insured’s own sphere or strains contractual relationships.
Effect and limits
Commercial leases (waiver in favour of the tenant), construction and erection projects (waiver between project parties), group programmes (waiver within the group) and logistics or operator agreements are typical use cases. The waiver usually does not apply to gross negligence or intent.
Negotiation and practice
The waiver should be mirrored in the underlying contracts (lease, works contract) and in the policy, so that no gap opens up between the civil-law agreement and the insurance cover.