Subrogation is the right your insurance carrier acquires — after paying your claim — to step into your shoes and pursue the party who was actually responsible for the loss. If your van is damaged in a parking lot and your commercial auto carrier pays the repair, they have the right to go after the driver who hit it. You've been made whole; now they want their money back from the right party.
Waiver of subrogation is a provision that eliminates that right for specific parties. When you add a waiver of subrogation in favor of a general contractor, you're agreeing that even if the GC (or their negligence) contributes to a loss, your carrier won't pursue the GC for recovery after paying your claim.
GCs require this because they're managing multiple subcontractors on a project, and they don't want their general liability policy getting hit with subrogation actions from every sub's insurance company after incidents on the site. From the GC's perspective, requiring waivers from all subs creates a clean risk transfer structure: each party handles their own losses, and carriers don't play hot potato with subrogation claims among themselves.
The Plain-English Mechanics
Here's the scenario without a waiver: Your electrician employee is injured on a GC's site due partly to a hazard the GC created and failed to correct. Your workers' comp carrier pays the medical bills and lost wages. After paying out $80,000, your WC carrier determines the GC's negligence contributed to the accident and files a subrogation action against the GC to recover some of that $80,000.
The GC is now defending a lawsuit from your WC carrier, on top of whatever other claims the project generated. The GC's GL carrier handles the defense, but it increases their loss ratio, which affects their next renewal. The GC is unhappy. This is exactly the scenario waiver requirements are designed to prevent.
With a waiver of subrogation in place on your WC policy: your WC carrier pays the claim, and that's the end of it. The carrier has agreed in advance to waive its right to pursue the GC. The GC is protected from the subrogation action.
Which Policies Need Waivers — and Why Each One Matters
General liability waiver
A waiver of subrogation on your GL policy prevents your GL carrier from pursuing the GC or project owner after paying a property damage or bodily injury claim. This is the most commonly requested waiver on construction projects.
GL waivers are usually endorsed onto the policy using ISO form CG 24 04 (waiver of transfer of rights of recovery against others to us) or a carrier's proprietary equivalent. The endorsement modifies the "transfer of rights" condition in the standard CGL form, which otherwise preserves the carrier's subrogation rights.
Workers' compensation waiver
This is the waiver most often missing from contractor programs. A WC waiver prevents your WC carrier from pursuing the GC or project owner after paying a work-related injury claim. Because workers' comp claims can be substantial — serious injuries generate large medical bills and long-term lost wage exposure — the subrogation potential is significant, and GCs care about this waiver as much as or more than the GL waiver.
WC waivers are added using form WC 00 03 13 (waiver of our right to recover from others) or a state-specific equivalent. In Texas, the standard form used by carriers writing workers' comp is the WC 00 03 13 or a carrier equivalent approved by TDI.
Commercial auto waiver
Auto waivers prevent your commercial auto carrier from pursuing the GC after paying a vehicle-related claim. These are required less frequently than GL and WC waivers, but sophisticated GC contracts include them in the standard requirement stack — particularly on projects where your vehicles are operating on a site the GC controls and where a GC action or road condition could contribute to an accident.
Blanket vs. Specific (Scheduled) Waivers
Like additional insured endorsements, waivers come in two flavors: blanket and specific (scheduled).
Blanket waiver
A blanket waiver of subrogation endorsement extends the waiver to any party you're required by written contract to provide a waiver to. You don't have to list each GC by name. As long as there's a written contract between you and the party requiring the waiver, the endorsement activates automatically.
Blanket waivers are the contractor's preferred structure for exactly the same reason blanket additional insured endorsements are preferred: you don't have to call your broker every time you sign a new subcontract just to add a named endorsement. The certificate can say "Blanket Waiver of Subrogation applies per written contract" and pass GC review without a specific policy endorsement for that project.
Specific (scheduled) waiver
A scheduled waiver names the specific party — "XYZ General Contractors Inc." — in the endorsement. Each party who requires a waiver needs a separate endorsement. This requires more administrative work, is slower to add for new projects, and requires broker involvement every time you sign a contract with a new GC who requires a waiver.
Some carriers only offer scheduled waivers, particularly for workers' comp. If your carrier doesn't offer blanket WC waivers, this becomes an operational challenge as your project volume grows. Ask about blanket waiver availability when you're shopping for WC coverage.
What a Waiver of Subrogation Costs
The cost varies by line of coverage and by carrier.
- General liability: Often included at no additional charge, particularly when the blanket waiver is standard on the policy form. Some carriers charge a small flat fee or a percentage of premium — typically 2% to 5% of the GL premium for a blanket waiver endorsement. On a $3,000 GL policy, that's $60 to $150 per year.
- Workers' compensation: WC waivers more commonly carry additional premium. The cost is typically 2% to 5% of the WC premium for the waiver, though carriers vary. Some carriers include blanket WC waivers in their standard premium and don't charge separately. On a $15,000 WC policy, the waiver premium could be $300 to $750 per year.
- Commercial auto: Usually a small additional premium when required, similar to GL waiver pricing.
The aggregate cost of waivers across all three lines — if your carriers charge separately for each — is typically under $1,000 per year for most small to mid-size contractor programs. This is not where to try to save money. The cost of not having waivers is not getting jobs.
Pre-loss requirement. Most WC and GL policies require that waivers of subrogation be agreed to in writing before a loss occurs. If a loss happens and you then try to execute a waiver with the GC, your carrier may decline to honor it. Waiver agreements must be in your contract before work begins, and the endorsement should be added to your policy (or already on it via blanket waiver) before the project starts. Retroactive waivers after a loss are often unenforceable.
Texas Workers' Comp Non-Subscriber Wrinkle
Texas allows most private employers to opt out of the workers' comp system — the "non-subscriber" option. If you're a non-subscriber, you don't have a WC policy, so there's no WC waiver of subrogation to add to a certificate.
This creates a problem for GC contracts that require WC waiver of subrogation. Some GCs handle this by requiring non-subscriber contractors to carry occupational accident insurance and provide a waiver on that policy instead. Others simply require WC coverage as a condition of the subcontract, which means non-subscribers can't bid those projects without buying into the WC system.
In practice, most Texas contractors who bid on commercial work carry workers' comp — not because the state requires it, but because GC contracts require it. The non-subscriber option is most commonly used by very small contractors doing direct consumer work where GC contract requirements don't apply.
For a full discussion of Texas workers' comp including the non-subscriber option, see our guide to workers' compensation in Texas.
The Contract Review Checklist for Waivers
Before you sign a subcontract, confirm these items related to waiver requirements:
- Which lines are required: Does the contract require waivers on GL only, or on GL plus WC plus auto? The standard stack for commercial work is all three.
- Blanket or scheduled: Does the contract specify any particular endorsement form, or does "waiver of subrogation" satisfy the requirement regardless of how it's structured? Most contracts don't specify the form — they just require the waiver.
- Who benefits from the waiver: Most contracts require the waiver to run in favor of the GC and project owner at minimum. Some also include the owner's lender, architect, and other project parties. A blanket waiver covers all of them as long as there's a written contract requirement.
- Timing: When must the waiver be in place? Before first mobilization is the standard answer. Confirm your policy already has a blanket waiver endorsement or have the specific endorsement added before you start work.
- Mutual vs. one-way: Most contractor waiver requirements are one-way — you waive in favor of the GC, but the GC doesn't necessarily waive in your favor. Some well-negotiated contracts include mutual waivers. A mutual waiver means the GC's carrier also can't pursue you after paying a claim. This is worth asking for if you have negotiating leverage.
What to Tell Your Broker When Setting Up Coverage
When you're placing or renewing your contractor program, tell your broker upfront that you need blanket waiver of subrogation endorsements on your GL, WC, and commercial auto policies. Ask specifically:
- Does this policy include a blanket waiver of subrogation endorsement, or do waivers have to be scheduled by name?
- Is there additional premium for the waiver, and if so, what is it?
- For the WC policy: which form does the carrier use for the waiver endorsement?
- Will the certificate reflect the blanket waiver language so GC compliance teams can verify it?
A broker who can't answer these questions without delay doesn't work with enough contractors to know the territory. For work requiring certificates with specific endorsement language, you need a broker who has done this before and knows how to structure the program correctly at policy inception — not one who figures it out mid-project when you're already on the clock.
Waiver of Subrogation vs. Additional Insured: Why You Need Both
These two endorsements are often required together but serve different functions:
| Endorsement | What it does | Who it protects |
|---|---|---|
| Additional insured | Extends your GL coverage to the GC for claims arising from your work | GC (they can make a claim under your policy) |
| Waiver of subrogation | Prevents your carrier from pursuing the GC after paying your claim | GC (they're protected from your carrier's subrogation action) |
A subcontract that requires both is saying: I want to be covered under your policy if your work injures someone, and I want protection from your carrier pursuing me if something goes wrong on this project. Both requirements are standard and reasonable. Missing either one creates a gap that can surface at the worst possible time.
For more on additional insured requirements and the endorsement forms that satisfy them, see our guide to additional insured vs. certificate holder. For the full subcontractor insurance requirement stack that Texas GCs impose, see subcontractor insurance requirements in Texas.
Frequently Asked Questions
Can a contractor agree to waive subrogation in a contract without telling their carrier?
You can sign a contract with a waiver of subrogation clause without getting a policy endorsement first. But if you do that without the endorsement, you've made a contractual commitment your policy may not support. If a loss occurs and your carrier tries to subrogate against the GC — which they're entitled to do under the standard policy — you'd be in breach of your contract with the GC. The safe approach is to have the endorsement in place before work starts, not just the contractual agreement.
Does a waiver of subrogation affect my rates?
Blanket waiver endorsements are typically priced at a small premium — the carrier is giving up the right to recover losses from third parties, which is worth something to them. But the premium impact is usually minor (2–5% of the relevant policy premium) and is rarely a reason to skip the endorsement. The access to jobs that requiring the waiver provides is worth far more than the endorsement cost.
If I'm at fault for a loss, does the waiver still apply?
Yes. The waiver applies regardless of fault. If your work causes a loss and your carrier pays the claim, the waiver prevents your carrier from pursuing the GC even if the GC was partly responsible. This is actually the most important scenario for the waiver — when there's shared fault and your carrier would otherwise have a legitimate subrogation claim against the GC.