A clause in a contract that prevents the pursuit of subrogation actions against a party is best described as?

• A. Waiver of Subrogation
• B. Release of Claims
• C. Subrogation Clause
• D. Risk Transfer Agreement

Answer: (A)

A waiver of subrogation is a contract clause that says the insurer will not pursue recovery from the other party for a loss covered by insurance. This prevents the insurer from exercising subrogation rights to sue a third party after paying a claim, which helps keep disputes between contracting parties from becoming litigation over who caused the loss. It’s commonly used in leases, construction contracts, and service agreements to protect relationships and stabilize costs.

Why this is the best description: it directly describes exempting a party from the right of subrogation, which is exactly what the clause does.

Why the other terms don’t fit as precisely: a subrogation clause typically establishes the insurer’s right to pursue a third party, not waive that right. A release of claims would absolve all parties from liability for the stated claims, which is broader than just subrogation rights. A risk transfer agreement covers who bears risk in a contract more generally and isn’t specifically about waiving subrogation rights.