What is a Waiver of Subrogation and why does it matter?

Let’s first Understand what subrogation means in commercial insurance.
Subrogation is when your insurance company pays for a loss and then after careful investigation seeks to recoup some or all of the losses paid out.
If the claimant and or their insurance company is proven to be on the hook for partial or full responsibility of the loss then the insurance company will work towards recovering those losses.
Waive comes from the Middle english word meaning to abandon or relinquish.
So Waiver of Subrogation, simply means that your business and the insurance company  give up the right to seek back any damages from losses that were paid during your contractual agreement.
Overall, a waiver of subrogation increases an insurance company’s financial exposure since they’re giving up their right to recover losses paid to third parties.
Because of this it’s typical for insurance carriers to charge a fee for waiver of subrogation endorsements.
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