What Is a Waiver of Subrogation and How Does It Affect Your Personal Injury Claim?

Autor: Shelby Benavidez  

Abogado colaborador: Brad Russell, abogado 

TL;DR: What You Should Know About a Waiver of Subrogation  

• A waiver of subrogation stops an insurance company from seeking repayment from a person or company protected by the agreement.  

• These waivers are common in construction and other industries where multiple companies work together.  

• A waiver of subrogation may affect your personal injury settlement if you’re hurt at work and someone outside your employer is responsible.  

• Most personal car accident claims don’t involve a waiver of subrogation, but you may encounter one if your accident involves a commercial insurance policy.  

• A personal injury attorney can review the waiver to determine whether it applies to your accident and how it may affect your compensation.  

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You pay for insurance every month so that when something goes wrong, you’re covered. And hopefully, that’s how it works when you need it. But if you’re hurt in an accident caused by someone else, there’s something you might not expect. 

Even though you’ve been paying for that coverage, if your insurance pays for your medical treatment and you later receive a personal injury settlement, your insurer may be entitled to some of that money, too — meaning less money in your pocket. 

But what if your insurance company had already agreed to give up that right? That’s where a waiver of subrogation comes in. Let’s talk about what it means, when it applies, and how it could affect your personal injury claim. 

Waiver of Subrogation Meaning: The Basics  

What Is a Waiver of Subrogation?

Subrogation is the process insurance companies use to recover money they’ve paid for an accident that someone else caused. Basically, if your insurance company pays for treatment for injuries caused by someone else’s negligence, it may seek repayment from the at-fault party or their insurance company.  

On the flip side, a waiver of subrogation is an agreement in which an insurance company gives up its right to seek repayment from someone protected by the waiver. This is also called a waiver of subrogation rights.  

Waiver of Subrogation Example: What Happens When Someone Gets Hurt?  

Let’s say you’re an electrician working for a subcontractor on a construction site. While you’re working, you fall from a ladder because the general contractor failed to address an unsafe condition. You suffer a serious back injury and can’t return to work for several months.   

Your employer’s workers’ compensation insurance pays for your covered medical care and part of your lost wages. But because the general contractor may have caused your injury, you also pursue a personal injury claim against them.  

Without a waiver of subrogation, your employer’s workers’ compensation insurance company may have the right to recover the benefits it paid you from your personal injury settlement.  

Imagine you receive a $100,000 settlement from the general contractor, and your workers’ compensation insurer previously paid $30,000 in benefits. The insurer may seek reimbursement for those payments from your settlement, subject to the laws governing that recovery.  

If a valid waiver of subrogation was in place, meaning your employer’s workers’ compensation insurer agreed to waive its recovery rights against the general contractor for the work involved in your injury, it may not be able to collect that $30,000 from the contractor or from the settlement the contractor pays you. That could mean more of your settlement is available to you after other fees, expenses, and valid claims are addressed.  

The important thing to understand is that the waiver doesn’t prevent you from filing a personal injury claim against the general contractor. It limits the workers’ compensation insurance company’s recovery rights.  

How a Waiver of Subrogation Could Impact Your Personal Injury Claim  

Who Benefits From a Waiver of Subrogation, and Could It Affect Your Settlement?  

Whether a waiver of subrogation helps you depends on how you were injured, which insurance policy applies, and who is protected by the agreement.  

Here are three situations where a waiver could come into play.  

1. You were injured while working on a construction site.  

On a construction site, you’ve usually got several companies working alongside each other. If someone from another company makes a mistake and you get hurt, your employer’s workers’ compensation insurance may cover your medical bills and lost wages. But you could also have a personal injury claim against the contractor responsible. 

If your employer’s insurance policy includes a waiver of subrogation that protects that contractor, the insurance company may not be able to recover what it paid from your settlement. That could mean more money in your pocket. 

2. You were injured while working at an oilfield or industrial facility.  

Oilfield and industrial companies often bring in outside crews for maintenance, repairs, and other jobs. Before those crews ever step on-site, their employers may have to sign contracts that include insurance requirements, like a waiver of subrogation. 

Let’s say you’re working on an oil rig and get seriously hurt because of unsafe equipment. An agreement your employer signed before you even started the job could now play a role in your personal injury claim. Depending on who the waiver protects and how it’s written, it could limit your employer’s insurance company’s ability to recover money after your accident. 

3. You were involved in a car accident.  

Waivers of subrogation are less common in personal auto insurance policies, but they can appear in commercial auto insurance agreements.  

For example, a delivery company might agree to obtain an auto waiver of subrogation endorsement as part of a contract with another business. This endorsement may prevent the delivery company’s auto insurer from seeking repayment from the business protected by the agreement for certain covered losses.  

However, having a waiver of subrogation on an auto policy doesn’t automatically change an injured driver’s right to file a personal injury claim. If you’re hurt in a crash involving a commercial vehicle, a qualified car accident attorney can review the policies and agreements to determine whether a waiver applies to your accident.  

Pros and Cons of a Waiver of Subrogation 

For injured workers, a valid waiver may help protect settlement money from certain workers’ compensation reimbursement claims.  

For businesses, waivers can reduce insurance disputes and protect companies from repayment demands made by another company’s insurer.  

However, waivers can also limit an insurance company’s ability to recover money from the party responsible for an accident. They may cost extra to add to a policy, and they don’t necessarily protect an injured person from every lien or reimbursement claim.  

A waiver that helps one person may have little or no effect on someone else’s claim.  

How Can a Personal Injury Attorney Help When a Waiver of Subrogation Is Involved?  

Let’s say you’ve been injured at work, and you’re pursuing a personal injury claim against another company. You’ve been told that your employer’s workers’ compensation insurance may have a right to part of your settlement.  

But how do you know whether that’s true? And what if your employer’s insurance policy includes a waiver of subrogation? This is where having an attorney in your corner can make a difference.  

A personal injury attorney can:  

• Find out whether a waiver exists. Your attorney can review your employer’s insurance policy and the contracts between the companies involved in your accident.  

• Determine whether the waiver applies to your injury. Just because a waiver exists doesn’t mean it covers every accident. Your attorney can check whether it protects the company responsible for your injury and the work you were performing.  

• Review repayment demands. If a workers’ compensation insurer requests money from your settlement, your attorney can determine whether it has a legal right to that money.  

• Address other liens and reimbursement claims. Even if a waiver prevents workers’ compensation reimbursement, other valid claims may still affect your settlement.  

Above all, having an attorney in your corner can give you peace of mind knowing someone is looking out for you and your best interests and fighting for the maximum compensation you deserve for your injuries.  

Why Understanding Your Insurance Rights Matters After an Injury  

When you’re injured because of someone else’s negligence, you expect the insurance companies involved to do their part. But what happens behind the scenes can be more complicated than most people realize.  

Your employer may have signed a contract years before your accident. That contract may have required an insurance waiver you’ve never seen. And now, that agreement could affect what happens to your personal injury settlement.  

You shouldn’t have to know every detail of your employer’s insurance policy to protect your rights. But you should know that the amount an insurance company says it’s owed isn’t always the amount it’s legally entitled to recover.  

At Daniel Stark Injury Lawyers, we believe injured Texans deserve to understand their rights and know where their compensation is going.  

If you’ve been hurt in an accident, don’t assume an insurance company’s repayment demand is final. Learn more about protecting yourself after an injury with advice from our personal injury attorneys, or contact Daniel Stark for a free consultation.  

Waiver of Subrogation FAQs  

Why Would I Want a Waiver of Subrogation?  

Businesses often want a waiver of subrogation to prevent another company’s insurance provider from seeking repayment after an accident. For injured workers, a valid waiver may also help protect settlement funds from certain reimbursement demands.  

How Much Does a Waiver of Subrogation Cost?  

The cost depends on your insurance policy and the type of waiver you need.  

For example, Texas workers’ compensation insurers may charge an additional premium for a waiver of subrogation. The cost can depend on whether the waiver protects one company or applies to multiple companies covered by written contracts.  

If you’re a business owner or contractor, ask your insurance provider how much the endorsement will cost before adding it to your policy.  

What Is Another Term for Waiver of Subrogation?  

A waiver of subrogation may also be called a waiver of subrogation rights, waiver of the right to recover, or waiver of subrogation endorsement.  

In Texas workers’ compensation insurance, you may see the term Texas Waiver of Our Right to Recover From Others Endorsement.  

How Do I Get a Waiver of Subrogation?  

If you’re a business owner or contractor, you can contact your insurance provider to request a waiver of subrogation endorsement.  

If you’re an injured employee, you generally wouldn’t purchase this waiver yourself. Instead, your attorney can investigate whether your employer’s insurance policy already includes one that applies to your injury.  

Is Subrogation Good or Bad?  

Subrogation isn’t necessarily good or bad. It depends on the situation. For example, if another driver hits your car, your insurance company may pay for the repairs and then seek repayment from the at-fault driver’s insurance. If that process is successful, you may also recover your deductible.  

But if you’re injured at work and receive workers’ compensation benefits, your employer’s insurance company may seek reimbursement from a personal injury settlement you receive from a negligent third party.  

Understanding who has the right to recover money, and whether a waiver limits that right, can make a big difference in your personal injury claim.