Waiver of Subrogation

[burdettecarnegie]

We are the Mandatory Vendor for a Franchise.
So many times when we help reviewing leases we see landlord sided leases.

One big area is waiver of Subrogation.
I understand it is this but need some help
Endorsement to a property liability policy whereby an insurer gives up the right to take action against a third party for a loss suffered by an insured. Typically, under terms of the subrogation clause , the insurer, having paid an insured for a loss, takes over any rights possessed by the insured who has suffered the loss. For example, an insured, John Smith, is hit by another car while he is driving. His insurance company pays his claim and then may sue or attempt to recover damages from the other driver.
In certain instances, the insured might want to get a waiver of subrogation rights from the insurer. For example, if a landlord assured a tenant that the tenant was not responsible for damage to the landlord's property, the landlord could make good on that promise only by getting the insurer to waive its subrogation rights. Otherwise, if the landlord's property was damaged by the tenant, the insurer would have to pay the claim and could then try to collect damages from the tenant.

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Also what if there was a building defect that caused claim., ie gross negligence of building owner. A lot of times we also see "regardless of gross negligence...."

Any ways to help in review of leases?
How to help clients understand so they can push back on the property manager and or Landlord?

 

[blue_wynd]

Still don't get what the issue is here. You are asking one thing about the tenant and then right after you ask about negligence by the landlord. The landlord will have his or her policy and your tenant will have theirs. Liability incurred by the respective parties will be paid by said parties or their insurance company if applicable.

I personally wouldn't accept a waiver of subrogation in a lease. You will need to ask the landlord why they are asking for it. It hinders the tenant from seeking recovery from his insurance carrier if that carrier cannot seek damages from the Landlord. Does that waiver apply only the Landlord or the landlord's insurance company too? If the former, then it might be doable. The landlord should have a lessor's risk coverage and if it is a NNN lease the tenant is paying for it anyway. I think the waiver is the similar as the hold harmless clause in a commercial lease? The worst case scenario would be the tenant having a claim against the landlord, the landlord doesn't have an insurance carrier to indemnify them and now we got the tenant with no help to seek damages since his carrier won't paid the claims since he waived their subrogation. He will need to tackle the loss or the ensuing lawsuits by his or herself.

I would have a lawyer review the lease as a start. Having that lawyer or the tenant with a good insurance agent to answer insurance related questions is another. I don't know what you really are asking, so I took a jab at it.
You will need to provide more info on exactly what you want answered.

 

[Milkman1265]

depends also... most commercial ground floor lease agreement will have a maintenance and repair clause.

That tenant is responsible for the upkeep of sidewalks etc...

Landlord maybe just want you to not go and attempt to collect from them, if you were sued.

Now i think if the injured were to sue BOTH, landlord and tenant, and tenant's insurer pays out, they cant come out and claim the landlords insurer for reimbursement.

But i'm sure, if it was landlords negligence, the lawyers/insurer of tenant will quickly delegate the claim to them and say we are not responsible for it since it is not in our lease and we are not responsible for it.

this doesn't stop the lawyers/injured from suing everyone though.

 

[Soundadvisor]

I think you will find the Conditions section of most property insurance policies will permit the insured to waive subrogation rights in writing prior to a loss.