The contract requires a waiver of subrogation on general liability and workers compensation. Which endorsements, and is it allowed in every state?
By the Rayon research desk · Last reviewed
On general liability the waiver is ISO endorsement CG 24 04, and on workers compensation it is NCCI endorsement WC 00 03 13. Each stops your insurer from recovering what it paid from the party named in the endorsement. The workers compensation waiver is not available everywhere: Kentucky and New Hampshire prohibit requiring it, and Missouri restricts it in construction contracts.
What is being waived?
When an insurer pays a claim, it normally takes over your right to recover that money from whoever caused the loss. That is subrogation. The standard general liability form CG 00 01 says so in its condition titled Transfer Of Rights Of Recovery Against Others To Us: if the insured has rights to recover a payment the insurer has made, those rights are transferred to the insurer, and the insured must do nothing after loss to impair them.
On a construction project the party most likely to be on the receiving end of that recovery is the owner or general contractor. So their contracts ask you to have your insurers give the right up in advance. The waiver does not add coverage or limits. It changes who your insurer can pursue after it has paid.
How do the two endorsements compare?
| General liability: CG 24 04 05 09 | Workers compensation: WC 00 03 13 | |
|---|---|---|
| What it says | “We waive any right of recovery we may have against the person or organization shown in the Schedule” | “We will not enforce our right against the person or organization named in the Schedule.” |
| Payments it applies to | Payments for injury or damage arising out of your ongoing operations, or your work done under a contract with that party and included in the products-completed operations hazard | Payments for an injury covered by the workers compensation policy |
| Who benefits | Only the person or organization shown in the schedule | Only those named in the schedule. The form says it does not operate directly or indirectly to benefit anyone else |
| Built-in limit | The 05 09 wording refers to your work “done under a contract with that person or organization” | An optional sentence limits it to work under a written contract that requires you to obtain the waiver |
| Published by | ISO | NCCI. California uses its own form, WC 04 03 06 |
Scheduled or blanket?
A scheduled waiver names one party. It has to be requested for each contract, and it does nothing for a party left off the schedule. A blanket waiver applies to any party you have agreed in a written contract to give a waiver to.
On general liability, Saxe Doernberger & Vita’s review of the December 2019 ISO filing reports two changes. CG 24 04 was revised to drop the reference to operations performed under a contract with the scheduled party, which had left it unclear whether an owner with no direct contract with a subcontractor was protected. ISO also introduced CG 24 53, an automatic waiver that does not need each party to be scheduled. The same review notes that the 2019 wording conditions the insurer’s waiver on the insured having waived its own rights before the loss.
On workers compensation, the New York manual notes to WC 00 03 13 distinguish blanket coverage from a waiver for each named person or organization, and treat them differently for premium. Ask which one your policy has.
Which states restrict the workers compensation waiver?
Workers compensation is governed state by state, and some states do not let a contract require the waiver. The states below are the ones this article could source. They are not a complete list, so check the state where the work is performed.
- Kentucky. KRS 342.700(3) says it is contrary to public policy and unlawful for an owner or employer to require another employer to waive its remedies under that section as a condition of receiving a contract or purchase order. Matthiesen, Wickert & Lehrer report that the state’s regulators read this as prohibiting all such waivers and no longer approve forms that include one.
- New Hampshire. The same firm reports that RSA 281-A:13(VI) prohibits any provision in any agreement that requires an employer or its insurer to waive subrogation rights.
- Missouri. The firm reports that nothing prohibits a waiver except in construction contracts, citing Mo. Rev. Stat. § 287.150.
- Tennessee, by contrast. A 2015 bulletin from the Department of Commerce and Insurance states that WC 00 03 13 is permitted and that insurers may charge for it.
What should I check before signing?
- Whether each policy has a scheduled or a blanket waiver, and the edition date of the form.
- That every party the contract names is reached. A subcontract often requires a waiver for the owner and lender as well as the general contractor.
- Whether the contract asks for the waiver on automobile and umbrella policies too. CG 24 04 modifies only the general liability and products/completed operations coverage parts.
- The state where the work is performed, for workers compensation. If the state bars the waiver, raise the conflict with the general contractor before signing, not at certificate review.
Sources
- City of Sierra Madre, acceptable waiver of subrogation endorsements (reproduces specimen ISO CG 24 04 05 09 and NCCI WC 00 03 13)
- New York Compensation Insurance Rating Board, WC 00 03 13, Waiver of Our Right to Recover from Others Endorsement, with manual notes
- ISO CG 00 01 04 13, Commercial General Liability Coverage Form
- Saxe Doernberger & Vita, The 2019 ISO Forms: Additions, Revisions, and Pitfalls (December 2019)
- Kentucky General Assembly, 2016 HB 200 (reproduces the text of KRS 342.700, including subsection 3)
- Matthiesen, Wickert & Lehrer, Kentucky subrogation law summary (workers’ compensation subrogation waiver endorsements)
- Matthiesen, Wickert & Lehrer, New Hampshire subrogation law summary (workers’ compensation subrogation waiver endorsements)
- Matthiesen, Wickert & Lehrer, Missouri subrogation law summary (workers’ compensation subrogation waiver endorsements)
- N.H. Rev. Stat. Ann. § 281-A:13(VI) and Mo. Rev. Stat. § 287.150 (statute text not fetched; cited as summarized by Matthiesen, Wickert & Lehrer)
- Tennessee Department of Commerce and Insurance, Bulletin: Waiver of Subrogation Endorsement (May 2015)
General information, not legal advice or an interpretation of your policy. Policy forms and endorsements control. Form numbers are © Insurance Services Office, Inc. and are cited for reference.