A waiver of subrogation is commonly known as what?

• A. Waiver of the transfer of recovery rights.
• B. Waiver of lien.
• C. Waiver of warranty.
• D. Waiver of payment.

Answer: (A)

Subrogation is the insurer’s right to step into the insured’s shoes and go after the party responsible for a loss after paying a claim. A waiver of subrogation means that right is given up, so the insurer will not pursue the responsible party to recover the amount paid. This arrangement is often included in contracts, leases, and insurance certificates to prevent disputes between contracting parties after a loss, making it easier for projects to move forward without finger-pointing.

That’s why the term described here is the waiver of the transfer of recovery rights. It specifically captures the idea of relinquishing the insurer’s ability to transfer the recovery claim to another party. The other options describe different concepts (like a lien, which is a security interest in property; a warranty, which is a promise about quality; or a payment waiver, which would avoid payment), none of which align with the idea of giving up the right to recover costs from the at-fault party.