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Waiver of Subrogation on the Commercial General Liability Policy

You know when you see a TikTok or Facebook reel on a hack/quick lesson you didn't know, and your mind is blown in seconds? We even have those moments in insurance.

Does additional insured status on the commercial general liability policy replace the need for a waiver of subrogation endorsement? Many think YES, but the answer is really NO!

Regardless of whether the party is listed as an additional insured on the policy, if the insured has a written contract with another party that requires waiver of subrogation, the agent needs to do the following.

1. Add endorsement CG 24 53 WAIVER OF TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO US (WAIVER OF SUBROGATION) - AUTOMATIC if not already included in a broadening/plus type endorsement.

2. Add CG 24 04 WAIVER OF TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO US endorsement. This endorsement lists each party for whom waiver of subrogation applies.

If there is NO written contract requiring waiver of subrogation and waiver of subrogation needs to be shown on a certificate, the agent needs to add CG 24 04 WAIVER OF TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHER TO US endorsement, which references the entity needing proof of waiver of subrogation.

Warning: Almost all automatic waiver of transfer of rights of recovery endorsements require a written contract or agreement stating waiver of subrogation is required before a loss. If there is no written contract, use CG 24 04 or similar.

These days many states have severe penalties for misrepresentations on a certificate. Show incorrect information on a certificate in Louisiana, and the punishment is severe for the agent. Louisiana Revised Statutes § 14:72.1.1 says the agent will be fined no more than $5,000 or imprisoned with or without hard labor for not more than five years or both.

Want the long version on why you still need a waiver of transfer of rights endorsement even if the party is listed as an additional insured? See Chris Boggs's article on the Big “I" Virtual University website titled “Does Additional Insured Status Replace the Need for waiver of Subrogation?" You can find the article at https://bit.ly/3YuaWrd.

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