A waiver of subrogation is an endorsement added to your insurance policy that prevents your insurance carrier from pursuing recovery (subrogation) against another party after paying a claim. In plain terms, if your carrier pays a claim and would normally have the right to go after the GC or property owner to recover what they paid, a waiver of subrogation eliminates that right. For roofing contractors, this endorsement is required by most commercial subcontracts and is a routine part of doing business.
How Subrogation Works Without a Waiver
When your insurance carrier pays a claim, they "step into your shoes" and acquire the right to pursue any third party who may have contributed to the loss. This is called subrogation. For example, if a GC's failure to secure the jobsite contributed to an accident that your workers comp carrier paid for, your carrier could subrogate against the GC to recover its payout.
While subrogation protects insurance carriers and can ultimately reduce your costs, it creates a problem on construction projects where multiple parties work together under contracts that allocate risk in specific ways. If your workers comp carrier subrogates against the GC you work for, that lawsuit damages your business relationship — even though you did not initiate it. The GC's insurance costs increase, and they may stop hiring you.
Why GCs Require Waivers of Subrogation
GCs require waivers of subrogation in their subcontracts specifically to prevent this scenario. By requiring you to waive subrogation on your GL, workers comp, and sometimes auto policies, the GC ensures that if a loss occurs on the project, the parties' insurance carriers pay their respective claims without cross-suing each other. This keeps the project's insurance costs contained and prevents litigation between parties who need to continue working together.
The subcontract language typically reads something like: "Subcontractor shall obtain a waiver of subrogation endorsement on all required insurance policies in favor of the General Contractor, Owner, and their respective officers, directors, and employees." This language requires you to add the endorsement to your policies before the subcontract is fully executed.
Which Policies Need the Waiver
Most subcontracts require waivers of subrogation on your general liability and workers compensation policies. Some also require it on your commercial auto and umbrella policies. The specific endorsement forms are:
General liability: ISO form CG 24 04 — Waiver of Transfer of Rights of Recovery Against Others to Us. This can be blanket (applying to all parties you are contractually required to provide a waiver to) or scheduled (listing specific parties by name). Blanket is strongly preferred.
Workers compensation: The standard WC 00 03 13 endorsement — Waiver of Our Right to Recover From Others. This endorsement must list the specific party or use blanket language. Note that some states restrict or prohibit waivers of subrogation on workers comp — your agent should confirm your state allows it.
Commercial auto: The CA 04 44 endorsement provides the waiver. It is less commonly required but appears in some subcontracts.
State-Specific Restrictions
Not all states allow waivers of subrogation on all policy types. For workers compensation specifically, states including New York, Virginia, Missouri, and several others either prohibit or restrict waivers of subrogation. In these states, the subcontract requirement may be unenforceable, but the GC may still require it — creating a compliance headache. Your agent should flag any state-specific restrictions and communicate them to the GC's risk manager before the subcontract is signed.
Cost
A waiver of subrogation endorsement typically costs $50 to $300 per policy per year. Some carriers include blanket waivers at no charge as part of their contractor's program. The cost is trivial relative to the contract value it protects. If a GC requires a waiver and you cannot provide one, you either lose the contract or risk breach of the subcontract's insurance provisions — which can shift liability to you in the event of a claim.
Best Practice
Add blanket waivers of subrogation to your GL and workers comp policies at inception — not on a project-by-project basis. This way, every subcontract requirement is automatically satisfied without waiting for your agent to process an endorsement. The small upfront premium increase eliminates delays and ensures compliance on every project from day one.