A Waiver of Subrogation clause is intended to prevent which action?

A Waiver of Subrogation clause is intended to prevent which action?

• A. Subrogation Against a Third Party
• B. Cancellation of the Policy
• C. Payment of Premium
• D. Appraisal of Loss

Answer: (A)

A Waiver of Subrogation stops the insurer from pursuing recovery from another party that caused the loss after they’ve paid a claim. By agreeing to this waiver, the insurer gives up the right to sue or seek reimbursement from that third party, which helps protect business relationships and avoid conflicts in contracts or leases. This is why the clause is intended to prevent subrogation against a third party. It doesn’t change whether the policy is canceled, nor does it affect premium payments or how a loss is appraised.

A Waiver of Subrogation stops the insurer from pursuing recovery from another party that caused the loss after they’ve paid a claim. By agreeing to this waiver, the insurer gives up the right to sue or seek reimbursement from that third party, which helps protect business relationships and avoid conflicts in contracts or leases. This is why the clause is intended to prevent subrogation against a third party. It doesn’t change whether the policy is canceled, nor does it affect premium payments or how a loss is appraised.