Waiver of Subrogation Inquiry
I recently secured approximately one million dollars in contracts with major ethanol companies for on-site work. Each company has requested that I submit my workers’ compensation information, specifically stating that a waiver of subrogation must be included. For instance, one company required that my Certificate of Insurance (COI) explicitly mention, “Coverage must be in favor of [COMPANY NAME] and its subsidiaries.”
All four ethanol companies are insisting on this requirement for me to gain access to their sites. However, my insurance agents have expressed that this is unusual and are hesitant to waive their rights to recover funds from these companies in case of fault. Does this mean these companies are effectively asking us to agree not to sue them, even if they are responsible for an incident? If that’s the case, how are other contractors managing to find insurance agencies that will accommodate this requirement? Given that these ethanol plants have numerous contractors coming and going each week, it seems likely that someone must be negotiating this into their policies.
Is it typical or unreasonable for ethanol companies to make such a request? Will it be challenging to find coverage that meets these conditions? Are there any insurance providers known to offer policies that include this waiver? I currently have over a million dollars in contracts lined up for April and May, and I’m eager to ensure I don’t miss out on this opportunity if there’s something my agent or I might be overlooking.
It sounds like you’re navigating a complex situation, and it’s understandable to feel both frustrated and concerned about the waiver of subrogation required by the ethanol companies.
Waivers of subrogation are indeed common in certain industries, especially in construction and contracting, where companies want to minimize their liability and risk. Essentially, a waiver of subrogation prevents your insurance company from seeking reimbursement from the other party (in this case, the ethanol companies) if they are found to be at fault for an incident. It can be a standard request in contracts in sectors where companies frequently share job sites and risks.
However, the concerns your insurance agents have are valid. Waiving the subrogation rights can expose your insurance carrier to greater risk, potentially leading to increased premiums or difficulties in obtaining coverage in the future. It can also make it hard to hold the other party accountable if they are indeed negligent.
Regarding your questions:
Is this request unreasonable? – It may not be unreasonable in the context of the industry, especially if it is a standard practice for them to manage liability on work sites with many contractors. It’s a way for them to protect themselves from potential claims.
Is it hard to find coverage? – Finding coverage that includes a waiver of subrogation can be challenging, as not all insurance companies are willing to agree to that. You may need to shop around or find a broker who specializes in your industry to help navigate this.
Insurance companies willing to provide coverage? – Look for insurance companies that are experienced in working with contractors in your field. Sometimes, larger insurers have policies that cater specifically to your type of contract work and are familiar with these requests. Networking with other contractors in your industry might also lead to recommendations for insurers who are more accommodating of waivers of subrogation.
Given the urgency of your situation with upcoming contracts, consider discussing with your insurance agent about your need for coverage quickly and exploring specialized brokers or insurers that have experience in working with businesses in the ethanol industry. They may have insights on how to balance these coverage requirements with your financial protection. Good luck!