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When an insurance company pays for a loss, and someone other than its insured might be to blame, the insurance company can sue those responsible to recover the financial losses it paid on the insured’s behalf.  The subrogation means that the insurance company is stepping into the shoes of its insured, and suing the responsible parties as if it were the insured filing suit directly.

When insurance companies start suing to get money back, this often results in cross-claims among parties and fights over who did what wrong.  While subrogation disputes during construction are less common, they can not only sour relationships among design and construction team members and owners, but they can also be expensive.  This type of litigation can slow the progress of construction, complicating the project or causing the owner to terminate its relationship with the design professional. 

Instead, parties can agree up front in their contracts that if there is a loss, and the loss is paid by insurance, the insurance company cannot pursue recovery through the process of subrogation from any party.  This contractual mechanism is referred to as a waiver of subrogation; as a result, the insurer’s rights are effectively waived by the policyholder. 

When not properly addressed a waiver of subrogation provision can create a headache for a design firm.  To learn how to avoid, XL Catlin’s Design Professional’s newest white paper – Waivers of Subrogation:  What are they and why should I care?  -- explains the key distinctions of these provisions, why design firms should have one and how they work in the construction world.  

Download the white paper now!


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Global Asset Protection Services, LLC, and its affiliates (“AXA XL Risk Consulting”) provides risk assessment reports and other loss prevention services, as requested. This document shall not be construed as indicating the existence or availability under any policy of coverage for any particular type of loss or damage. AXA XL Risk. We specifically disclaim any warranty or representation that compliance with any advice or recommendation in any publication will make a facility or operation safe or healthful, or put it in compliance with any standard, code, law, rule or regulation. Save where expressly agreed in writing, AXA XL Risk Consulting and its related and affiliated companies disclaim all liability for loss or damage suffered by any party arising out of or in connection with this publication, including indirect or consequential loss or damage, howsoever arising. Any party who chooses to rely in any way on the contents of this document does so at their own risk.

US- and Canada-Issued Insurance Policies

In the US, the AXA XL insurance companies are: AXA Insurance Company, Catlin Insurance Company, Inc., Greenwich Insurance Company, Indian Harbor Insurance Company, XL Insurance America, Inc., XL Specialty Insurance Company and T.H.E. Insurance Company. In Canada, coverages are underwritten by XL Specialty Insurance Company - Canadian Branch and AXA Insurance Company - Canadian branch. Coverages may also be underwritten by Lloyd’s Syndicate #2003. Coverages underwritten by Lloyd’s Syndicate #2003 are placed on behalf of the member of Syndicate #2003 by Catlin Canada Inc. Lloyd’s ratings are independent of AXA XL.
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