Skip to content

In the intricate world of insurance, the term “Waiver of Subrogation” frequently arises. While it might sound complex, grasping this concept is essential for businesses, contractors, and anyone involved with insurance policies. Let’s explore what a waiver of subrogation is, its importance, and why it might be necessary.

What is a Waiver of Subrogation?

A waiver of subrogation is a clause in an insurance policy that prevents the insurer from seeking reimbursement from a third party responsible for a loss to the insured. In simpler terms, when an insurance company pays out a claim, they usually have the right to “step into the shoes” of the insured and pursue recovery from the party that caused the damage, a process known as subrogation.

However, with a waiver of subrogation in place, the insurer relinquishes this right. This means that even if another party is responsible for the loss, the insurance company will not attempt to recover the claim amount from that party.

Why is a Waiver of Subrogation Needed?

Facilitating Business Relationships:
In many business arrangements, particularly in construction and leasing, waivers of subrogation are common to maintain harmonious working relationships. For instance, contractors working on a project might agree to waivers of subrogation to prevent their insurance companies from suing each other, which could lead to disputes and strained relationships.


Contractual Requirements:
Often, contracts between businesses will include a waiver of subrogation clause. This is especially true in industries like construction, real estate, and manufacturing. Including this clause ensures that if a loss occurs, the involved parties’ insurers will not engage in litigation against each other, promoting smoother operations and cooperation.


Risk Management:
Waivers of subrogation are a strategic risk management tool. They can help avoid lengthy and costly legal battles between insurers, which can ultimately affect the involved businesses. By waiving subrogation rights, companies can mitigate the risk of being embroiled in legal disputes over insurance claims.


Cost Efficiency:
Legal proceedings related to subrogation can be expensive and time-consuming. By including a waiver of subrogation, businesses can save on legal costs and focus on resolving issues without the added burden of litigation.

How Does a Waiver of Subrogation Work?

When a waiver of subrogation is included in an insurance policy, the insured party typically agrees not to hold a third party liable for damages that might otherwise be recoverable. 


Here’s an example: Imagine a contractor working on a construction site causes accidental damage to a building. The building owner’s insurance company pays for the repairs. Without a waiver of subrogation, the insurance company might seek to recover the repair costs from the contractor. However, if there is a waiver of subrogation in place, the insurance company would not pursue the contractor for reimbursement, even though the contractor was responsible for the damage.

When Should You Consider a Waiver of Subrogation?

  • Entering Contracts: Review your contracts carefully. If a contract requires a waiver of subrogation, ensure that your insurance policy includes this clause to remain compliant and avoid potential breaches.
  • Collaborative Projects: In projects involving multiple parties, such as joint ventures or construction projects, waivers of subrogation can help maintain good relationships and streamline operations.
  • Lease Agreements: Landlords and tenants often use waivers of subrogation to prevent their insurers from suing each other in case of a loss. This can be particularly useful in commercial real estate.


Vendor Relationships: When working with vendors or subcontractors, including a waiver of subrogation can prevent disputes and foster better working relationships.


A waiver of subrogation is a powerful tool in the realm of insurance and risk management. 

By preventing insurers from pursuing reimbursement from third parties, it fosters better business relationships, ensures contractual compliance, and helps avoid costly legal disputes. 

Whether you are a business owner, contractor, landlord, or tenant, understanding and appropriately utilizing waivers of subrogation can provide significant benefits and peace of mind in your professional dealings.

In the realm of insurance and risk management, two key terms often surface: Certificate of Insurance (COI) and Waiver of Subrogation (WOS). Both play crucial roles in managing risk and ensuring proper coverage, yet they serve distinct purposes and are used in different contexts. Here, we explore the differences between a COI and a WOS, their purposes, and when each is applicable.

What is a Certificate of Insurance (COI)?

A Certificate of Insurance (COI) is a document provided by an insurance company that serves as proof of insurance coverage. It summarizes the key details of an insurance policy without providing the full policy itself. Typically, third parties such as clients, landlords, or contractors request a COI to verify that a business or individual has the necessary insurance coverage in place.

Key Components of a COI:

  • Policyholder Information: Name and address of the insured.
  • Insurance Company Information: Name and contact details of the insurer.
  • Policy Numbers: Unique identifiers for the insurance policies.
  • Types of Coverage: Specific types of insurance coverage included (e.g., general liability, workers’ compensation, auto liability).
  • Policy Limits: Maximum amount the insurer will pay under each coverage type.
  • Effective and Expiration Dates: Dates when the coverage begins and ends.
  • Description of Operations: Brief description of the operations or activities covered by the insurance.

Purpose and use of a COI:

Proof of Coverage: Provides evidence that the policyholder has the required insurance coverage.


Contractual Compliance: Ensures that the policyholder meets the insurance requirements of a contract or agreement.


Risk Management: Allows third parties to verify adequate insurance is in place to cover potential risks associated with a business relationship.

What is a Waiver of Subrogation (WOS)?

A Waiver of Subrogation (WOS) is a clause in an insurance policy where the insurer agrees to relinquish their right to seek reimbursement from a third party responsible for causing a loss. Essentially, it means that if the insurer pays a claim, they will not pursue the third party (or their insurer) for recovery of the paid amount.

Key Aspects of a WOS:
  • Relinquishment of Recovery Rights: The insurer waives their right to “subrogate” or seek recovery from the third party responsible for the loss.
  • Policy Amendment: A WOS is typically added as an endorsement or amendment to an existing insurance policy.


Specific to Relationships: Often used in contracts where ongoing business relationships need to be protected from potential legal disputes over subrogation claims

Purpose and use of a WOS:

Facilitates Business Relationships: Helps maintain good business relationships by preventing insurers from suing each other over claims.


Contractual Requirements: Many contracts, especially in construction and leasing, require a WOS to avoid litigation between the parties involved.


Risk Management: Reduces the risk of legal disputes and associated costs by waiving subrogation rights.

Key Differences Between a COI and a WOS

Function and Purpose:
Serves as proof of insurance coverage and details the specifics of the policy, ensuring compliance with contractual requirements.
WOS: A clause that waives the insurer’s right to seek recovery from a third party responsible for a loss, protecting business relationships and avoiding litigation.


Document Type:
A standalone document issued by the insurer to provide a summary of insurance coverage.
WOS: An endorsement or clause within an insurance policy.

Use Cases:
COI: Used to provide proof of insurance to clients, contractors, landlords, or other third parties.

WOS: Included in contracts to prevent insurers from pursuing subrogation claims against third parties, thus fostering cooperative business relationships.

Includes detailed information about the types of coverage, policy limits, and effective dates.
WOS: A specific clause that waives the insurer’s subrogation rights, often not detailed in a COI.

When to use Each

Certificate of Insurance (COI):

Required when entering into contracts that specify insurance coverage requirements.

Necessary to demonstrate compliance with insurance mandates in business relationships.

Commonly requested by landlords, clients, or contractors.


Waiver of Subrogation (WOS):

Included in contracts where maintaining strong business relationships is crucial.

Used in industries like construction, where multiple parties work together and subrogation claims could disrupt collaboration.

Required by contractual agreements to avoid potential legal disputes over insurance claims.


While both a Certificate of Insurance (COI) and a Waiver of Subrogation (WOS) are essential components in the realm of insurance and risk management, they serve distinct purposes. A COI provides proof of insurance coverage and ensures compliance with contractual requirements, while a WOS protects business relationships by waiving the insurer’s right to seek recovery from third parties. Understanding the differences between these two can help businesses navigate their insurance needs more effectively, ensuring they have the right protections and agreements in place for their specific situations.

Insurance is a vital aspect of running a business, especially when it comes to safeguarding employees and assets. Among the various insurance documents that business owners need to be familiar with are the Workers’ Compensation Proof of Insurance Certificate and the Certificate of Insurance (COI). Although these documents may appear similar, they serve different purposes. Let’s explore the differences between the two and provide specific information about reading your workers’ compensation certificate, particularly in the context of COMPEO’s Employee Leasing program.

Workers' Compensation Proof of Insurance Certificate

Purpose: This certificate specifically confirms that an employer has obtained workers’ compensation insurance. Workers’ compensation insurance is mandatory in most states and provides coverage for employees who suffer work-related injuries or illnesses. It ensures that employees receive medical care, rehabilitation, and wage replacement benefits while protecting employers from potential lawsuits related to workplace injuries.


Contents: A Workers’ Compensation Proof of Insurance Certificate typically includes:

  • – The name and address of the insured (employer).
  • – The policy number.
  • – The effective and expiration dates of the policy.
  • – The insurance carrier’s name and contact information.
  • – A statement confirming the coverage for workers’ compensation.


Use Case: Employers often need to present this certificate to state regulatory agencies, contractors, or clients to demonstrate compliance with workers’ compensation laws. It serves as proof that they have the necessary coverage to protect their employees.

Certificate of Insurance (COI)

Purpose: A Certificate of Insurance is a broader document that verifies the existence of various types of insurance coverage, such as general liability, property, automobile, and professional liability insurance. It provides a summary of the key details of an insurance policy but does not confer any rights to the certificate holder.

Contents: A COI typically includes:

  • – The name and address of the insured (policyholder).
  • – The policy numbers.
  • – The types of insurance coverage and their limits.
  • – The effective and expiration dates of each policy.
  • – The insurance carrier’s name and contact information.
  • – A description of the insured operations or locations.
  • – The name of the certificate holder.

Use Case: Businesses often provide a COI to clients, landlords, or vendors to prove that they have the necessary insurance coverage required for a contract or lease agreement. It reassures the certificate holder that the policyholder has sufficient coverage to handle potential risks associated with their operations.

Key Differences

Scope of Coverage:

The Workers’ Compensation Proof of Insurance Certificate is specific to workers’ compensation insurance.

A Certificate of Insurance can encompass various types of insurance coverage.


Purpose and Use:

The Workers’ Compensation Proof of Insurance Certificate is used to demonstrate compliance with state workers’ compensation requirements.

A Certificate of Insurance is used to provide evidence of insurance coverage to third parties for contractual or legal purposes.



The Workers’ Compensation Proof of Insurance Certificate focuses solely on workers’ compensation policy details.

A Certificate of Insurance includes a broader range of insurance information, such as general liability, property, and automobile coverage.


Issuing Requirements:

Workers’ Compensation Proof of Insurance Certificates are often required by state laws and regulations.

Certificates of Insurance are generally requested by other businesses or entities as part of contractual agreements.

Reading Your Workers' Compensation Certificate with COMPEO

For businesses enrolled in COMPEO’s Employee Leasing program, understanding your workers’ compensation certificate is crucial. Here are some specific pointers to help you navigate the document:


Where can I find my company name?
Your company’s name and effective coverage date are referenced in the Description of Operations Box at the bottom of the certificate.


Why is my company name not in the insured box?
COMPEO is listed as the employer of record for tax and insurance purposes.


Why is COMPEO the employer of record?
Your program is an “Employee Leasing” program (Per Florida Statute 468.520(4)), which is an arrangement whereby a leasing company assigns its employees back to the client and is covered under COMPEO’s insurance policy.


Who is covered under this workers’ compensation certificate?
As stated in the Description of Operations Box, coverage is only provided for leased employees but not subcontractors, independent contractors, or any other person not enrolled in the COMPEO program policy.


Both the Workers’ Compensation Proof of Insurance Certificate and the Certificate of Insurance are vital documents in the business world, each serving distinct but equally important purposes. Understanding the differences between them helps ensure that your business remains compliant with legal requirements and meets the expectations of clients, partners, and regulatory bodies. 


Additionally, for businesses utilizing COMPEO’s Employee Leasing program, knowing how to read your workers’ compensation certificate ensures clarity on coverage and compliance. By maintaining accurate and up-to-date insurance documentation, you can safeguard your business and provide peace of mind to all stakeholders involved.