Olympia Master Builders - Contractors Adding Subrogation Waiver Clauses

Subrogation waiver clauses in construction contracts and work orders protect contractors from being sued by their customers' insurance companies in the event that fire or a jobsite accident damages the building or its contents.

New court cases show that without these clauses, even contractors with little or no role in a loss are being targeted by property insurance carriers attempting to recoup their losses. Since building owners pay the same for property insurance regardless of the clauses in their construction or remodel contracts, subrogation waiver clauses are uncontroversial and are being added to all standard construction contracts and work orders.

Having a subrogation waiver clause in your contract or work order means the difference between your being paid to rebuild a damaged or destroyed building under a change order paid for by your customer's insurance carrier, or your being thrown off the job and sued by the insurance carrier for damages which may be well in excess of your own insurance policy limits.

The following is an example of a simple subrogation waiver clause which should be included in all contracts with project owners including service calls:

Subrogation Waiver: All parties waive their rights against each other for any damages caused by fire or other peril covered by any property insurance.

If you have any questions about using subrogation waiver clauses in your contracts, please contact your attorney.

This article was provided by Chris Raders of McGregor Insurance in Ocean Shores, WA.