What is a waiver of subrogation?

Reviewed by Matthew Bartlett, Director, Apex Insurance Brokers Limited · Last reviewed 2026-08-05

First, what is subrogation?

Subrogation is a long-standing principle of English insurance law. When an insurer pays a claim, it is entitled to "step into the shoes" of the insured and pursue any third party who was legally responsible for the loss, using the insured's own rights of recovery. Anything the insurer recovers goes towards reducing what it has paid out.

The idea sits alongside the principle of indemnity: insurance is meant to put you back in the position you were in before the loss, not to leave you better off. If your insurer compensates you and you kept a separate claim against the party at fault, you could end up recovering twice for the same loss. Subrogation prevents that by routing the recovery through the insurer.

A simple example: a supplier's negligence damages your equipment, your insurer pays your claim, and the insurer then pursues the supplier to get its money back. You do not run that recovery action yourself; the insurer does, in your name.

So what does a waiver do?

A waiver of subrogation removes that right of recovery in respect of a particular party. If your policy includes a waiver in favour of, say, a client or a joint-venture partner, your insurer agrees it will not pursue that named party even if that party's actions contributed to a loss the insurer has paid.

The waiver usually originates in a commercial contract rather than in the insurance policy itself. One party asks the other to arrange insurance that will not "come back" against it. To make that work, the insured then needs its insurer to agree to the waiver, and that agreement is recorded in the policy, typically by endorsement.

Two things therefore have to line up: the contractual promise you give the third party, and your insurer's consent to honour it. Giving the promise without the insurer's agreement is where problems arise (more on that below).

Subrogation vs waiver of subrogation

Where waivers of subrogation usually appear

Waivers are most familiar in contexts with several parties working on the same project or property, where cross-claims between them would be commercially awkward. Common settings include:

• Construction and engineering contracts — where employers, contractors and sub-contractors often agree not to pursue each other for insured losses.
• Commercial leases — where a landlord who insures the building may waive recovery against tenants for insured damage.
• Supply, services and outsourcing agreements — where a larger customer requires its suppliers' insurers not to subrogate against it.
• Joint ventures and consortia — where partners want losses absorbed by the shared insurance rather than fought out between them.

How this affects professional indemnity cover

Subrogation is most visible in property and liability claims, but it matters for professional indemnity (PI) too. PI responds to your own liability for professional errors, but a PI insurer that has paid a claim may still look to recover from another party whose fault contributed — for example a sub-consultant, a joint expert, or another firm in the chain.

If a client's contract asks you to accept a waiver of subrogation, you are effectively promising that your PI insurer will not chase that client for a contribution, even where the client shares responsibility. Before you sign, two points are worth checking:

• Does your policy allow it? Many PI wordings contain a condition requiring you not to prejudice the insurer's rights of recovery without consent. Agreeing a waiver could breach that condition unless the insurer has approved it.
• Does the wording go further than intended? A broadly drafted waiver can strip the insurer of recovery rights against parties you did not mean to protect, which insurers may resist or price for.

The safe route is to send the clause to your broker before signing, so the insurer's position can be confirmed and, where needed, a matching endorsement added. If you would like a wording checked, Apex can review it as part of arranging your PI cover.

Why it matters — the practical impact

For the party protected by the waiver, the benefit is obvious: it will not face a recovery action from someone else's insurer over an insured loss. For the party giving the waiver, and its insurer, the effect is that a route to recover money is closed off, so the insured loss stays with the policy.

That has knock-on effects. An insurer that cannot subrogate against a particular party carries more of the ultimate cost, which is one reason insurers want to see and approve waiver clauses rather than discover them after a claim. It is also why blanket promises to waive subrogation "in favour of all parties" are treated with caution.

Getting it wrong can be worse than the waiver itself. If you commit to a waiver your policy does not permit, and you then prejudice your insurer's recovery, the insurer may argue that its position has been harmed — potentially affecting how a claim is handled. Aligning the contract and the policy up front avoids that risk.

Waiver of subrogation and disclosure

Under the Insurance Act 2015, a business buying insurance must make a "fair presentation of the risk" to the insurer. Contractual commitments that affect the insurer's rights — including obligations to waive subrogation — can be relevant to that presentation. In practice this reinforces the same message: tell your broker and insurer about waiver requirements, so the cover is arranged on the correct basis rather than assumptions being made later.

Common questions

Does a waiver of subrogation increase my premium?

It can. Because it removes a route for the insurer to recover money, an insurer may take it into account when pricing or may ask for the wording to be narrowed. The impact depends on how broadly the waiver is drafted and who it protects, so it is best confirmed with your broker before you agree the clause.

Can I agree a waiver of subrogation without telling my insurer?

You should not. Many policies require you not to prejudice the insurer's rights of recovery without its consent, and a waiver can do exactly that. Agreeing one without approval risks breaching a policy condition and undermining a future claim. Always run the clause past your broker or insurer first.

Is a waiver of subrogation the same as an indemnity or hold-harmless clause?

No. A waiver of subrogation limits what an insurer can recover after paying a claim. An indemnity or hold-harmless clause allocates liability directly between the contracting parties. They often appear in the same contract and interact, but they do different jobs, and each should be reviewed on its own terms.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This guide is general information, not advice on a specific policy or a substitute for reading your policy wording.