Why does our landlord want a waiver of subrogation?

When your insurer pays a claim caused by someone else, it inherits your right to recover from that party. That recovery right is subrogation and it is a normal part of how insurance economics work.

A waiver of subrogation is an agreement that you will not allow your insurer to pursue a specified party. Commercial parties ask for it because it converts an insured loss into a closed matter rather than the beginning of litigation between two businesses that have to keep working together.

A REIT or landlord lease will require it on property and often on liability, so that a fire or water loss does not turn into the operator insurer suing the building owner. A management agreement will require it in both directions. A construction contract will require it on builders risk. And workers compensation waivers are routinely required by any party whose premises your staff enter.

The workers compensation one is the one most often missed, because it requires a specific endorsement, usually carries a small premium charge, and has to name the party or be issued on a blanket basis.

Many policies contain a condition prohibiting the insured from impairing the insurer recovery rights after a loss. A waiver signed before a loss is generally permitted, and most modern forms say so, but the safe and standard practice is to have the insurer agree in an endorsement.

Without the endorsement two things can go wrong. Your insurer may pursue the party you promised to protect, putting you in breach of the lease. Or your insurer may argue that your agreement prejudiced its rights. Neither is a fight worth having over an endorsement that is usually available on request.

Read the lease and the management agreement and list every party requiring a waiver and on which policies. Request blanket waiver endorsements where required by written contract, which covers future contracts without a new request each time.

Confirm the workers compensation waiver separately, since it lives on a different policy with a different carrier and a different endorsement, and it is the one that gets forgotten.

And be aware of what you are giving up. A waiver in favor of a landlord whose deferred maintenance caused a loss means your insurer absorbs it and your loss history carries it into your next renewal. That is a real cost and it belongs in the lease negotiation, not in the certificate request.