Waiver of subrogation, in plain English

The honest answer is that a waiver of subrogation is your carrier promising not to sue the GC. That’s the whole clause. Your carrier pays a claim, and under normal rules it then gets to go after whoever caused the loss to get its money back. That right is called subrogation. The waiver gives it up, as to one party, on one job, because a contract told you to. It shows up on almost every GC exhibit, usually on three lines at once, and it’s the clause that gets a certificate bounced when the comp policy doesn’t carry it. If that just happened, the certificates page tells you what to send us. Here’s what the clause does on each policy, why the GC cares, and what it costs.

Subrogation first, then the waiver

Start with the word nobody uses in the field. Subrogation is what happens after a carrier pays. Your carrier writes the check, then steps into your shoes and looks for someone to recover from. If your operator is hurt because a GC’s crew pulled the barricades off an open trench, your comp carrier pays the benefits, then turns around and sues the GC for what it paid. The carrier got there by paying you, so it inherits your right to recover.

A waiver of subrogation is an endorsement on your policy that says the carrier won’t do that against a specific party. The party is the GC (or the owner, or the HOA, whoever the contract names). The carrier still pays the claim. It just stops there.

Two things to keep straight. The waiver doesn’t change what your policy pays or who it pays. And the waiver has to exist before the loss, by endorsement, with the contract signed. A GC can’t ask for it after the operator is in the hospital.

What it does on each line

The exhibit usually asks for the waiver on comp, GL, and auto. Each one behaves a little differently.

Workers’ compensation

This is the one the GC cares about most, and the one carriers price. Colorado comp is no-fault: your employee gets benefits regardless of who caused the injury. Colorado employers must carry workers' compensation insurance as soon as they have one or more employees, whether part-time, full-time, or family members (C.R.S. 8-40-203(1)(b), 8-44-101); the state can fine an uninsured employer up to $500 for every day without coverage. (C.R.S. 8-40-203(1)(b); 8-44-101; 8-43-409) Because the employee generally can’t sue you for the same injury, the comp carrier’s subrogation claim against a third party is often the biggest recovery on the table, and the GC is the nearest third party on every job. The waiver on the workers’ compensation policy closes that door. Most carriers offer it by endorsement, blanket or scheduled, and commonly charge for it as a percentage of the payroll on the waived job. On a hardscape crew with a full-season payroll that charge is real money. It’s still less than the contract you don’t get.

General liability

On the GL, the waiver matters when your carrier pays a property damage or injury claim that the GC contributed to. Your crew’s Yanmar mini skid steer clips a gas meter on a Castle Rock lot because the GC’s site plan had the meter in the wrong place. Your GL pays the third-party claim. Without the waiver, the carrier can try to recover part of it from the GC. With it, the carrier eats it. Most standard GL forms already contain a condition that lets the insured waive recovery rights in a written contract signed before the loss, so on many policies the GL waiver is a matter of confirming the condition is there rather than buying a new form.

Commercial auto

The auto waiver follows the same logic on the truck. A Bell haul truck backs into a GC’s stacked forms because a GC laborer was spotting and walked away. Your commercial auto carrier pays, and the waiver keeps it from pursuing the GC. Auto waivers are usually blanket by endorsement and rarely priced separately. Confirm it’s there, because the exhibit will ask and the certificate can only say it if the form exists.

Why the GC wants it

The same reason the GC wants primary wording: their carrier expects claims from your work to stay on your policy. A GC’s carrier that has to defend against your comp carrier’s recovery suit is paying for a claim it thought went down to the sub. So the exhibit asks you to waive it in advance. The primary and non-contributory article covers the order-of-payment half of that same thinking, and the GC exhibit article puts all the clauses in order.

There is a second reason worth knowing. Most subcontracts carry an indemnity clause that makes you responsible for the GC’s losses tied to your work. If your carrier subrogated against the GC and won, the GC could in theory turn around and tender that loss back to you under the indemnity. The waiver stops the circle before it starts.

What it costs you

On the comp line, a charge, commonly figured on the payroll for the waived job or as a flat charge for a blanket form. On GL and auto, usually little or nothing. The bigger cost is the recovery you give up: if the GC really did cause your operator’s injury, your comp carrier can’t get its money back, and that claim sits on your loss history at full value. Over a few years that shows up in your experience rating. That’s a real tradeoff, not a paperwork one, and it’s the honest reason the comp waiver isn’t free.

What we don’t control is how a given comp carrier prices the waiver for a given class code. Some are reasonable on it. Some price it in a way that makes a small job not worth signing. That’s a number to get before you bid, and the carrier is the only one who can give it.

Blanket or scheduled

A blanket waiver applies to any party your written contract requires you to waive against. A scheduled waiver names one party and needs a new endorsement for the next one. Both require a signed contract before the loss. The difference is whether the certificate desk can say yes on a Friday or has to call the carrier first.

What to ask before you sign

Ask the GC whether the waiver has to be on all three lines or the comp only, because that decides the cost. Ask whether their carrier accepts a blanket endorsement or wants the GC named. Then ask us which lines already carry it, so the certificate says only what the policy backs up. Grading and site prep crews subbing to GCs in Douglas County see this clause on every contract; hardscape crews and the rest of the landscaping trades see it from GCs and from HOAs, and the HOA version usually names the management firm too.

Where to go from here

If the certificate is due and you’re not sure the comp carries the waiver, send the exhibit through the certificates page and we check the endorsements first. If you’re looking at your first GC contract, the one-employee comp article covers the policy this clause rides on. And if you’d rather know before the next exhibit arrives, a policy review marks which lines carry the waiver and which don’t.

Serving businesses located in Colorado. Coverage is determined by the policy language and the carrier.