Waiver of Subrogation Rights
from the desk of Nahom Gebre
When a party pays a claim caused by the negligence of another, the party who paid the claim is legally entitled to step into the shoes of the negligent party and pursue any claims that the negligent party may have. This concept is known as subrogation. Clients often require that consultants waive subrogation rights; this is done to provide finality to the settlement of claims. Clients want to know that if a claim is paid by their insurance carrier to a third party that the matter is settled and that they will not be facing renewed litigation by the insurance company seeking to recover money.
Design professionals should check with their broker as to how their other insurance policies address waiver of subrogation. The Schinnerer and CNA professional liability policy allows the insured firm to waive subrogation rights against their client. However, the waiver of subrogation rights has to be in a written agreement prior to a claim or circumstance.
For additional information, please see our Management Advisory on waiver of subrogation rights at http://www.schinnerer.com/risk-mgmt/Documents/ManagementAdvisories/Waiver-of-subrogation.pdf. (Access limited to policyholders only.)