Section 20 Waiver of Subrogation

• Library: Prof Liability 2005

Subrogation involves an insurer “stepping in the shoes” of an insured and seeking recovery of payments made to an insured under the provisions of an insurance policy against a third party for alleged negligence. The right of subrogation is generally contained within the

insurance policy and allows the insurer to seek damages against a tortfeasor in the name of its own insured.

Construction contracts may contain “waiver of subrogation” provisions, which are a potential defense against a subrogation claim made by an insurer. For example, American Institute of Architects (AIA) document A201, General Conditions of the Contract for Construction (1997), is often incorporated by reference in construction contracts and makes up part of the “contract documents” applicable to construction projects. Article 11.4.5.1 of this document states:

If during the Project construction period the Owner insures properties, real or personal or both, at or adjacent to the site by property insurance under policies separate from those insuring the Project, or if after final payment property insurance is to be provided on the completed Project through a policy or policies other than those insuring the Project during the construction period, the Owner shall waive all rights in accordance with the terms of Subparagraph 11.4.7 for damages caused by fire or other causes of...