Waivers of subrogation stir many questions among our non-emergency medical transportation clients. Can we provide them? What are they? These questions usually arise when our clients enter into a transportation contract. Such contracts often require specific levels of insurance coverage be maintained, additional insured status, and a waiver of subrogation.
Waiver of Subrogation
A waiver of subrogation endorsement can apply to other coverages, but is usually only requested for a workers’ compensation policy. It limits your insurance company from collecting reimbursement for damages caused by the other party of the contract.
Example
Suppose your business contracts with a nursing home to transport their residents to doctors’ appointments. One day while your driver is stopping to pick up passengers at that facility, a nursing home employee is driving back from town on a business errand, misjudges a turn in the parking lot, and slams into your parked vehicle, severely injuring your driver.
Your workers compensation coverage would pay for your driver’s medical bills and lost wages. However, if your contract with the nursing home included a waiver of subrogation, your insurance carrier would not be able to collect reimbursement from the nursing home’s insurance policy, even though the accident was their fault.
Are they good or bad?
That answer depends.
The Good
From the nursing home’s perspective, a waiver of subrogation greatly simplifies who is responsible for what. It essentially says, “My workers compensation policy covers my employees, and your policy covers your employees, no matter what the circumstances.” Such simplification has value in a contract. It also helps avoid strained client relations by not allowing your insurance policy to collect against that of the nursing home. Lastly, a waiver of subrogation is often required just to get the contract in the first place.
The Bad
Generally, restricting your insurance company from collecting against an at-fault party is bad for your business. Continuing with the earlier example, your business would now have a large claim on its record which would increase your insurance premiums for several years, despite the accident not being your driver’s fault. If there had been no waiver of subrogation, your insurance company could collect from the nursing home’s insurance policy and therefore the incident would have little effect on your rates.
Conclusion
There is not a perfect answer applicable to all situations as to whether your business should agree to a waiver of subrogation. Each case depends on your company’s specific position and details of the contract. Seek legal advice. However, we hope you now possess a broader appreciation for the implications of a waiver of subrogation.
Bankers Insurance specializes in non-emergency medical transportation insurance. We offer this coverage in all fifty states. Every one of our clients is assigned a personal agent in our office, provided their direct email address, and given a phone number that rings right on their desk. If you aren’t already a client of Bankers Insurance, let us provide a no obligation quote. Start the process by completing our NEMT online quote request.
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