Even Monkeys Cannot Explain Why Companies Insist On Workers’ Compensation Waivers Of Subrogation Endorsements

Most state workers’ compensation laws, or cases construing them, allow the employer and its carrier to waive its right to subrogate against a third party that caused or contributed to an employee’s injury.

The purpose of a subrogation waiver is not well understood and is a subject of some confusion in the marketplace.

Most frequently, contracting parties agree to contractually require the inclusion of a waiver of subrogation endorsement in a workers’ compensation policy simply because the requirement is contained in the form contract, and has been for many years.

On other occasions, the requirement is included in the belief that such a waiver will provide some protection or immunity from lawsuits filed by employees of other subcontractors.

Unfortunately, an effective waiver of subrogation does not prevent a subcontractor’s employee from suing the contractor.