A waiver of subrogation is an agreement that an insurer will give up its right to recover a paid claim from another party. The Insurance Bureau of Canada defines it as "a pre-loss voluntary relinquishment by an insurer of its right to seek reimbursement."
Why It Matters for Snow Contractors
Commercial contracts sometimes ask the contractor to waive subrogation in favour of the owner, or ask both sides to waive it. The goal is to stop insurers from suing the parties to the contract after a loss.
The problem is that you usually cannot waive your insurer's rights on your own. If a contract requires a waiver and your policy does not allow it, you may be in breach of your contract or put coverage at risk. That is why it is worth sending the clause to a broker before you sign.
Example
A property management contract says the contractor waives all rights of recovery against the owner. Later, the owner's unlit parking barrier damages the contractor's plow truck. If the contractor's insurer has agreed to the waiver, it may not be able to pursue the owner to recover what it paid for the repair.
Related Terms and Guides
- Subrogation
- Hold harmless agreement
- Snow removal contracts and insurance
- Insurance requirements for commercial snow contracts
General information only, not insurance or legal advice. Policy wordings differ; a licensed broker can explain how your own policy and contracts treat this.
Further reading: Insurance Bureau of Canada: Insurance glossary
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Frequently Asked Questions
Can I sign a waiver of subrogation without telling my insurer?
It is safer to check first. Policies differ on whether they permit waivers, and a broker can confirm or request an endorsement.
Why would a property owner want a waiver of subrogation?
It reduces the chance of insurers suing the parties to the contract after a loss.