Ask Regina

Q. We requested a waiver of subrogation on a business auto policy written by a well-known
carrier. The endorsement was titled “Waiver of Subrogation Endorsement,” a company-specific form with the following wording:
 “We agree to waive any and all subrogation claims against the person or organization designated below except for losses that are due in whole or part to the negligence or errors and omission of the designated person or organization.”regina

Is this endorsement actually waiving subrogation?

A. Interesting endorsement wording, especially since the company could only waive subrogation if the designated person or organization shown on the endorsement was negligent, and the endorsement is saying that they can subrogate anyway if the negligence was due in whole or in part of the designated person or organization. This endorsement is not waiving subrogation.
The ISO Business Auto policy, CA 00 01 (as well as other ISO and TDI standard auto, auto dealers and garage coverage forms) includes the following subrogation provision already in the policy language:
Transfer Of Rights Of Recovery Against Others To Us
If any person or organization to or for whom we make payment under this Coverage Form has rights to recover damages from another, those rights are transferred to us. That person or organization must do everything necessary to secure our rights and must do nothing after “accident” or “loss” to impair them.
Note that, similar to the CGL policy, this subrogation right only applies to acts that take place “after loss.” There is otherwise no explicit grant of subrogation right to the insurer, and likewise no prohibition of the insured’s right to waive the right of subrogation before a loss, and no requirement that it be in writing.
In practice and in common law, insurers have a right to recover paid losses from negligent third parties. In order to clarify this and provide a means to designate a person or entity in the policy, ISO provides endorsement CA 04 44 (Waiver of Transfer of Rights of Recovery Against Others to Us – Waiver of Subrogation), and the TDI BAP provides endorsement TE 20 46 (Changes in Transfer of Rights of Recovery) which read as follows:
CA 04 44 (Waiver of Transfer of Rights of Recovery Against Others to Us – Waiver of Subrogation)
TE 20 46 (Changes in Transfer of Rights of Recovery)
The Condition entitled “Transfer of Rights of Recovery Against Others To Us” does not apply to (Name of Entity).
This entry was posted in Ask Regina, Uncategorized and tagged , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s