Question 1

How do waiver of subrogation clauses work in Florida contracts?

Accepted Answer

FL clause operation: the clause is inserted into a contract (lease, construction agreement, or purchase contract) and typically states: "Each party waives any right of subrogation that their respective insurance carriers may have against the other party." The effect: if a loss occurs and one party’s insurer pays the claim: the insurer cannot sue the other party to recover the payment. Both parties: must notify their respective insurers (to ensure the waiver does not violate their insurance policy terms). FL: the clause is enforceable as a matter of contract law (the parties have the right to: allocate risk by agreement).

Question 2

When are waiver of subrogation clauses used in Florida?

Accepted Answer

Common uses: commercial leases (the landlord and tenant each carry property insurance; the waiver prevents: the landlord’s insurer from suing the tenant for a fire, and vice versa), construction contracts (the owner and contractor waive subrogation for property damage during construction: common in AIA contracts), and condominium declarations (the condo association’s insurance covers the common elements; the waiver prevents: the association’s insurer from suing a unit owner who causes damage). FL-specific: given FL’s hurricane and flood risks, waivers of subrogation are important in: coastal properties, high-rise condominiums, and commercial developments.

Question 3

What are the potential issues with subrogation waiver clauses in Florida?

Accepted Answer

Issues: insurance policy conflict (the waiver may violate the insurance policy’s subrogation clause: some policies prohibit: the insured from waiving subrogation rights without the insurer’s consent; if violated: the insurer may: deny the claim), premium impact (some insurers charge higher premiums for policies with subrogation waivers), scope (the waiver may be: too broad or too narrow: the parties should: clearly define which losses are covered by the waiver), and enforceability (FL courts: enforce subrogation waivers but may: limit the scope if the waiver is: ambiguous, unconscionable, or contrary to public policy). Best practice: have a FL insurance attorney review the clause and coordinate with the insurer.

Waiver of Subrogation Clause

FL Waiver of Subrogation Clauses

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FL Uses

Issues

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