Short answer
A waiver of subrogation on workers comp lets the client avoid a recovery action by your insurer after it pays an injured employee’s claim. Clients often ask for it in the contract. Two points matter here. The certificate only reports what the policy says, so the waiver must be added by endorsement. Some states also restrict or prohibit these waivers on workers’ comp, so the request may not be possible as written. Whether a policy responds depends on its wording and the facts.
What a waiver of subrogation on workers comp means
Subrogation is the insurer’s right to recover what it paid from a party that caused the loss. A waiver gives up that right against a named party.
Here is a simple example. Your employee is hurt on a contractor’s site, and your workers’ comp insurer pays the claim. Without a waiver, the insurer may try to recover that money from the contractor. With a waiver, it generally gives up that right. Contractors and owners often ask for this so a project injury doesn’t turn into a claim against them.
Our article on lease insurance requirements, additional insured status and waiver of subrogation shows how the same request appears in other contracts. Our workers’ compensation page covers the basic coverage.
The certificate is not the coverage
A certificate of insurance reports what the policy says. It doesn’t change the policy. A checked waiver box on a certificate means little if the endorsement isn’t on the policy itself.
The endorsement is what creates the waiver. Many firms assume the box is enough because the client accepted the certificate. Our article on the certificate of insurance versus the additional insured endorsement explains the same gap. Our article on how to read a certificate of insurance shows what a certificate does and doesn’t show.
Endorsements come in two common forms:
- A blanket endorsement applies when a written contract requires the waiver, so you don’t add each client by name.
- A scheduled endorsement lists specific parties, and someone must add each new client.
Ask your agent which form your policy carries. If a compliance vendor rejects your certificate, our article on a certificate of insurance rejected by a compliance vendor explains what to check.
States that restrict workers’ comp waivers
Some states limit or prohibit waivers of subrogation on workers’ comp. New Hampshire is one example. Its statute, RSA 281-A:13, addresses the subject, and you should read it with an attorney or your agent. Other states have their own rules, and those rules can change.
This matters because a contract may ask for something the project state doesn’t allow. The request may not be possible as written, even if your carrier is willing. Check the project state before you agree to the contract language. An attorney should answer any question about how a specific statute applies.
What to send the client when you can’t give the waiver
Tell the client early, and explain the reason in writing. A short note from your agent can help. It should say that the project state restricts the waiver on workers’ comp and include the statute reference.
Some clients accept the note and adjust the requirement. Others may ask for alternative wording. Our contract check can help you review the insurance side of the requirement before you respond. Whether the client accepts the explanation depends on the client and the contract.
What we see at Hardcover
While reviewing a client’s certificates, we found a workers’ comp waiver box checked without an endorsement behind it. We told the client and asked the carrier to add the endorsement. We then found that the project state restricts waivers on workers’ comp, so we explained that to the client as well.
That review shows why the policy matters more than the certificate. A short check of the endorsements and the project state usually shows whether the request can be met.
Questions to ask your agent
- Is the waiver endorsement actually on my policy?
- Is it blanket?
- Does the project state allow it?
Related questions
If the certificate says waiver of subrogation, am I covered?
Only if the endorsement is on the policy. The certificate doesn’t change the policy.
Can every state add a waiver to workers’ comp?
No. Some states restrict it. Your agent can check the project state.
What is a blanket waiver?
It is an endorsement that applies when a written contract requires it, so you don’t need to add each client.
General education, not legal advice. Hardcover is an insurance agency, not a law firm.