Waiver of Subrogation in Roofing
What Is a Waiver of Subrogation?
Subrogation is your insurance company's right to recover claim payments from the party that caused the loss. A waiver of subrogation is an endorsement on your policy that relinquishes this recovery right in favor of a specified party. In practical terms, if you cause damage on a project and your insurer pays the claim, the insurer cannot then sue the GC or owner to recover those funds, even if those parties share some fault. This is a risk transfer tool that allocates loss exposure between contracting parties and keeps disputes out of court.
When Waivers Are Required in Roofing Contracts
Most commercial roofing contracts and AIA documents require mutual waivers of subrogation between the owner, GC, and all subcontractors. This creates a contractual ecosystem where each party's insurance bears its own losses without cross-party recovery actions. On residential jobs, waivers are less common but may appear in builder contracts or HOA agreements. Builders risk policies almost always require waivers of subrogation among all project parties to prevent the property insurer from suing contractors for construction-phase damage.
Impact on Insurance Premiums
Waivers of subrogation typically add a modest charge to your premium, usually 2% to 5% of the policy cost. The reason is straightforward: by waiving subrogation, your insurer loses the ability to recover paid claims from responsible third parties, increasing their net loss exposure. Blanket waivers, which apply automatically to any party you are contractually required to waive subrogation for, are more cost-effective than scheduling individual waivers per project. Most commercial roofing policies include blanket waivers as standard because the industry universally requires them.
Blanket vs. Scheduled Waivers
A blanket waiver of subrogation automatically applies to any party with whom you have a written contract requiring the waiver, without needing to notify your carrier for each project. A scheduled waiver names specific parties and must be updated for each new contract. Blanket waivers are strongly preferred for roofing contractors who work multiple commercial jobs because they eliminate the administrative burden of requesting individual endorsements. Verify with your broker that your blanket waiver language matches the contractual requirements you typically encounter.
Risks of Signing a Waiver
The primary risk is that you cannot recover from a negligent third party if their actions cause a loss on your policy. For example, if a GC's improper scheduling forces your crew to work in unsafe conditions and a claim results, you cannot subrogate against the GC if you have waived that right. Additionally, if you sign a contract requiring a waiver but fail to secure the endorsement on your policy, the waiver clause may still be enforceable contractually while your insurer denies coverage for the claim. Always confirm your policy supports any waiver you agree to in a contract.
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