The short version
- Subrogation: after paying a claim, your insurer steps into your shoes and sues whoever caused the loss to get its money back.
- Waiver of subrogation: your insurer gives up that right against a specific party, usually your client, general contractor, or landlord.
- Why contracts ask for it: so a loss on the job is paid by insurance without turning into litigation between the parties.
- You usually need an endorsement. Many policies only allow a waiver if it is added by endorsement or agreed in writing before the loss. Check before you sign.
- Washington workers comp is different. Coverage comes from L&I, not a private insurer, so a request for a workers comp waiver from a Washington business needs a specific answer.
A real contract clause
Washington's statewide IT contract 14822 says: "Contractor waives all rights of subrogation against the State of Washington and any Purchaser for the recovery of damages to the extent such damages are or would be covered by the insurance specified herein." In that contract it sits alongside additional insured and primary and noncontributory requirements, a combination you will see in many insurance clauses.
How subrogation works, with an example
A tenant's employee leaves a space heater on and a fire damages the building. The landlord's property insurer pays for repairs, then sues the tenant to get its money back. That suit is subrogation. If the lease had a mutual waiver of subrogation that the landlord's property policy allowed, the insurer could not bring that suit. Workers comp is different in both states: in Idaho, a general contractor whose subcontractor carries comp generally cannot be sued as a third party (Idaho Code 72-223), and in Washington the claim belongs to the worker and L&I (RCW 51.24).
Which policies a contract may name
| Policy | What a waiver does | Notes |
|---|---|---|
| General liability | Your insurer will not pursue the client to recover a liability claim it paid | Usually added by endorsement, scheduled or blanket |
| Commercial auto | Same, for auto claims | Usually by endorsement |
| Commercial property | Your property insurer will not pursue the landlord or tenant after paying for damage | Common in leases; many property forms allow waivers agreed in writing before the loss |
| Workers comp (Idaho and other states) | Your comp insurer will not pursue the client to recover benefits it paid | Requires an endorsement; insurers may charge for it |
| Workers comp (Washington) | Coverage comes from L&I, whose recovery rights are set by Washington's workers comp law, not by your policy | Ask how the contract's request applies before you sign |
| Umbrella | Should follow the underlying policies | Confirm the umbrella does not conflict |
Washington: L&I and stop-gap
In Washington, workers comp is provided by L&I or by employers approved to self-insure; private workers comp policies are not allowed. If a third party causes a worker's injury, the worker can sue, L&I or the self-insurer gets a share of any recovery to repay benefits, and the claim passes to L&I or the self-insurer if the worker chooses not to sue (RCW 51.24.030, 51.24.050, 51.24.060). Those rights come from the statute, not from a policy, so a state-fund employer has no workers comp policy to endorse. We found no L&I guidance or Washington court decision on how an employer's contract waiver affects them. Contracts written for other states often ask anyway; raise it before signing.
A waiver on stop-gap employers liability, which Washington employers buy privately, is a separate question, and some stop-gap policies can be endorsed.
Do not confuse it with waiving workers comp immunity
A waiver of subrogation is about your insurer's rights. A waiver of Title 51 immunity is about your own legal protection from lawsuits over employee injuries. Washington's statewide IT contract 14822, for example, provides that the contractor "expressly waives any immunity it may be granted" under Title 51, to the extent of indemnity claims by the purchaser, and states that the waiver "was mutually negotiated and agreed upon," the condition Washington law sets for that kind of waiver in construction, design-services, and motor carrier contracts (RCW 4.24.115). That waiver can pass your own employees' injury claims back to you through the indemnity, and whether your stop-gap responds depends on its contractual liability coverage. See the Washington stop-gap gap.
What to do when a contract requires it
- Find every policy the clause names. General liability, auto, property, workers comp, and umbrella each need their own answer.
- Ask your broker for the endorsements and whether they are blanket (anyone you agree with in writing) or scheduled (named parties).
- Raise Washington workers comp early if the client expects a waiver on L&I coverage.
- Get the endorsements issued before work starts, and keep copies with the certificate.
- Check the whole insurance section with our contract insurance checker; waivers usually travel with additional insured and primary and noncontributory requirements.