Waiver Of Subrogation Endorsement Explained: What Insurance Agencies Must Know

Subrogation is the insurer's right to step into the insured's shoes and recover money from the party that caused the loss. When an insurer pays a $200,000 workers compensation claim because a general contractor's negligence injured a subcontractor's employee, the insurer can sue the general contractor to recoup that payment. A waiver of subrogation endorsement eliminates that recovery right for specifically named parties.

Construction contracts, commercial leases, and lender agreements routinely require waivers of subrogation. Understanding which ISO forms apply, how the waiver appears on ACORD 25, and when a blanket waiver makes sense is fundamental agency competency.

Key Takeaways

• Subrogation is the insurer's right to recover from a third party after paying a claim. A waiver endorsement eliminates that right for designated parties.
• The main ISO waiver forms are CG 24 04 (GL), WC 00 03 13 (workers comp), and CP 12 18 (property).
• On ACORD 25, the WOS column appears in each line of coverage. Check the box only if the endorsement is confirmed.
• Blanket waivers cover all parties with a qualifying written contract. Scheduled waivers name specific parties.
• Cost ranges from $25–$150 per party for a scheduled GL waiver, or a flat percentage increase for blanket waiver.
• When WOS exists, the insurer cannot recover from the negligent third party - increasing the insurer's net loss and potentially affecting future premiums.

What Subrogation Is and Why It Exists

Subrogation exists to prevent double recovery and to keep losses with the responsible party. When a fire caused by a negligent contractor destroys a tenant's equipment, the tenant's property insurer pays the claim. Without subrogation, the insurer absorbs the entire loss even though the contractor caused it. Subrogation allows the insurer to pursue the contractor for reimbursement.

The insurer's recovery right arises from two sources: common law (the equitable right to stand in the insured's place) and policy language. Most commercial policies include language assigning the insured's rights of recovery to the insurer as a condition of payment.

Subrogation applies across multiple coverage lines. General liability, workers compensation, commercial property, and inland marine policies all contain subrogation rights. Each line requires a separate waiver endorsement - one waiver on GL does not waive rights on workers comp.

What a Waiver of Subrogation Endorsement Does

A waiver of subrogation endorsement modifies the policy to eliminate the insurer's recovery right against the specified party. The insurer agrees, as a condition of issuing the endorsement, that it will not pursue the named party for reimbursement of claims it pays.

The effect is one-way. The waiver runs in favor of the specified party. The named insured's insurer cannot sue that party. But the specified party's own insurer is unaffected - they can still pursue their own subrogation rights against the named insured if facts support it.

The waiver does not affect the underlying claim payment. The insurer still pays covered claims. The endorsement only changes who the insurer can pursue for recovery after payment.

Why Waivers of Subrogation Are Requested

Three contract types drive most waiver requests.

Construction contracts. General contractors and project owners routinely require subcontractors to waive subrogation in their favor. If a subcontractor's employee is injured and the workers comp carrier would otherwise have a subrogation claim against the GC, the waiver eliminates that exposure. Associated General Contractors (AGC) standard subcontract forms typically require waivers of subrogation on GL and workers comp.

Commercial leases. Landlords require tenants to waive subrogation so the landlord cannot be sued by the tenant's insurer if a covered loss is partly the landlord's fault. Many commercial lease forms from the Building Owners and Managers Association (BOMA) require mutual waivers of subrogation in the property insurance section.

Lender agreements. Lenders require waivers of subrogation from property insurers as a condition of approving loans. The lender does not want the insurer recovering from a party connected to the lender's collateral. This requirement typically appears in the mortgage commitment letter and the property insurance requirements section of the loan documents.

ISO Endorsement Forms by Coverage Line

Each major coverage line has a dedicated ISO waiver endorsement form. Using the wrong form - or checking the WOS box on ACORD 25 without the underlying endorsement - is an E&O error.

General Liability: CG 24 04 (Waiver of Transfer of Rights of Recovery Against Others to Us). This endorsement amends the standard ISO GL policy (CG 00 01) to waive the insurer's right of recovery against the designated person or organization. The form requires a written contract between the named insured and the waiver recipient that predates the loss.

Workers Compensation: WC 00 03 13 (Waiver of Our Right to Recover from Others Endorsement). This endorsement modifies the standard NCCI workers comp policy to waive recovery rights against the designated employer. It is frequently required on construction projects under subcontract terms. Carriers charge separately for this endorsement - the cost is typically $100–$300 per project or a percentage of the WC premium for blanket coverage.

Commercial Property: CP 12 18 (Loss Payable Provisions - Waiver of Subrogation). This endorsement modifies the commercial property policy (CP 00 10 or CP 00 20) to waive recovery rights against the designated party. Landlord-tenant property arrangements and lender requirements commonly trigger this form.

Inland Marine and Auto. Inland marine policies and commercial auto policies may also include waiver endorsements, but they are not ISO-standardized in the same way. Check the specific policy form and carrier endorsement schedule.

How the Waiver Appears on ACORD 25

ACORD 25 has a "WOS" (Waiver of Subrogation) column in the coverage table for each line. There is a separate WOS box for each coverage line: general liability, automobile, umbrella, workers compensation, and any additional lines listed.

The box is checked only when the policy has the corresponding endorsement for that specific line. A WOS on GL does not justify checking WOS on workers comp. Each box represents a separate endorsement verification.

Agencies commonly check WOS boxes based on what a prior certificate showed rather than verifying the current endorsement schedule. This is the same error pattern as the additional insured certificate problem - and it carries the same E&O consequences.

ACORD 25 WOS verification checklist:

1. Identify which lines the contract requires a waiver on.
2. Pull the current endorsement schedule for each line.
3. Confirm the endorsement form (CG 24 04, WC 00 03 13, CP 12 18, or carrier equivalent) appears on the schedule.
4. Confirm the waiver beneficiary matches the contract party (for scheduled waivers).
5. Check the WOS box only for confirmed lines.

Blanket vs. Scheduled Waiver of Subrogation

The structure options for waiver endorsements parallel those for additional insured status: blanket or scheduled.

Scheduled waiver. The endorsement names specific parties in favor of whom the waiver applies. For example: "XYZ General Contractors, Inc." Each new waiver recipient requires a new endorsement, carrier approval, and premium charge. Typical GL cost: $25–$150 per party. Typical WC cost: $100–$300 per project or endorsement.

Blanket waiver. The endorsement waives subrogation rights against any party with whom the named insured has a written contract requiring such waiver, without naming each party individually. The blanket form is available on GL (through carrier-specific endorsements, as ISO CG 24 04 is a scheduled form) and workers comp (some carriers offer blanket WC 00 03 13 coverage). Cost is typically a flat percentage of the relevant line's premium.

For contractors with many subcontracts and project owner agreements, a blanket waiver endorsement is more economical beyond roughly 10–15 scheduled parties per year. The blanket approach also reduces the risk of a missed endorsement request when a new contract requires a waiver.

The written contract requirement. Blanket waivers require a written contract between the named insured and the waiver beneficiary that predates the loss and requires the waiver. A verbal agreement does not trigger blanket coverage. Agencies should document the qualifying contract when issuing certificates under a blanket waiver.

Cost of a Waiver of Subrogation Endorsement

Cost varies by coverage line, carrier, and whether the endorsement is scheduled or blanket.

Some carriers include a blanket waiver in the base GL policy for construction accounts at no additional charge. Others charge per endorsement. The only way to know is to review the policy declarations and endorsement schedule for the specific account.

WOS cost is separate from additional insured cost. Contracts that require both - which is standard in construction subcontracts - carry premium for each.

When a Waiver of Subrogation Creates Problems

A waiver of subrogation is not always a neutral act. By eliminating the insurer's recovery right, the waiver increases the insurer's net loss exposure on every claim involving the waiver beneficiary.

Net loss increase. On a $500,000 workers comp claim where the GC's negligence was 60% responsible, the WC carrier would normally recover $300,000 from the GC's GL insurer. With a blanket WOS, that recovery is zero. The WC carrier absorbs the full $500,000. Over time, this increases loss experience, which affects renewal premiums.

Pre-loss contract requirement. Most WOS endorsements require the written contract to be in place before the loss. An agency that endorses a blanket WOS retroactively - or fails to obtain the WOS endorsement before issuing the certificate - creates a coverage gap for any losses that occurred before the endorsement was in force.

Carrier notification requirements. Some carriers require advance notice before a waiver can be issued for high-risk parties or operations. Issuing a certificate showing WOS without carrier confirmation that the endorsement is in place or will be issued is an E&O error.

State-specific workers comp restrictions. Several states restrict or prohibit waivers of subrogation on workers compensation policies. New York, for example, limits WOS endorsements on WC policies. Agencies servicing multi-state contractors need to verify state-specific restrictions before confirming WOS availability on the WC line.

Frequently Asked Questions

What is a waiver of subrogation endorsement?

A waiver of subrogation endorsement modifies an insurance policy to eliminate the insurer's right to recover from a designated third party after paying a claim. Without the endorsement, the insurer can sue the third party to recoup claim payments. With the endorsement, the insurer gives up that recovery right for the named party. The waiver must be formalized through an endorsement - a certificate of insurance alone does not create a valid waiver.

Which ISO forms are used for waiver of subrogation?

The three primary ISO waiver endorsement forms are CG 24 04 for general liability, WC 00 03 13 for workers compensation, and CP 12 18 for commercial property. Each modifies a different policy form. A waiver on one line does not extend to other lines - a contract requiring WOS on both GL and workers comp requires both CG 24 04 and WC 00 03 13 endorsements.

What is the difference between blanket and scheduled waiver of subrogation?

A scheduled waiver names specific parties in the endorsement. A blanket waiver covers all parties with whom the named insured has a written contract requiring the waiver, without naming each party. Blanket endorsements are more efficient for insureds with many contracts requiring waivers. The cost is typically a flat percentage of the relevant line's premium versus $25–$300 per party for scheduled endorsements.

How does waiver of subrogation appear on ACORD 25?

ACORD 25 has a WOS column for each coverage line in the coverage table. The box for a given line is checked only when the policy has a confirmed WOS endorsement for that line covering the certificate holder. A WOS on GL requires CG 24 04 (or equivalent). A WOS on workers comp requires WC 00 03 13 (or equivalent). Each box represents a separate endorsement verification - checking one does not justify checking others.

Does a waiver of subrogation cost extra?

Yes, in most cases. Scheduled GL waivers (CG 24 04) typically cost $25–$150 per party. Workers comp waivers (WC 00 03 13) typically cost $100–$300 per project. Blanket waivers run 1%–5% of the relevant line's premium. Some carriers include blanket GL waivers for construction accounts at no charge. The only definitive answer for a specific account requires reviewing the endorsement schedule and carrier pricing.

Can a waiver of subrogation hurt the insured?

Yes. A waiver eliminates the insurer's recovery right against the waiver beneficiary, which increases the insurer's net loss on any claim involving that party. This worsens the account's loss experience over time and can increase renewal premiums. For accounts with many WOS requirements and high claim frequency, carriers sometimes limit or price WOS endorsements more aggressively at renewal. Agencies should make clients aware that WOS commitments affect long-term loss experience.

For additional context on how waiver of subrogation interacts with additional insured requirements in construction contracts, see post #196. For details on how to track endorsement status across a commercial book, see post #198.

Written by Javier Sanz, Founder of BrokerageAudit. Last updated April 2026.

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