Frequently we get the questions, what is a waiver of subrogation, and what does it mean for my company? A waiver of subrogation is an endorsement that you can add to your policy that prohibits an insurance company from recovering the money they paid on a claim against a negligent third party. There are many benefits to ensuring your vendor has a waiver of subrogation in their insurance contract:
- It limits your exposure
- Can help avoid ruining business relationships
- And lowers your insurance expense
It is important to note that the third party will have increased costs to their insurance by adding a waiver of subrogation to their contracts. This is because an insurer knows they will have no way of recovering losses from others at fault.
There are two types of waivers of subrogation that an insured can get. A blanket waiver covers all contracts that contain a waiver of subrogation within the policy period if both parties abide by the contract language. A scheduled waiver requires an individual policy for each contract entered where a waiver of subrogation is within the contract.
Senior Living Facilities utilize waivers of subrogation with vendors to reduce their exposure to claims. This prevents the vendor’s insurance company from suing their insurance in the event of a loss. This is a valuable tool in negotiating contracts and limiting your exposure to losses.
Written by Andy Clark
About the author: Andy Clark is a VP of commercial lines with a focus in healthcare. He works with clients to get the coverage that best suits their needs. During his free time Andy enjoys golfing and hanging out with his wife.
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