What term describes an agreement where one party relinquishes subrogation rights against another?

• A. Waiver of Subrogation
• B. Hold Harmless Agreement
• C. Indemnity Agreement
• D. Release of Claims

Answer: (A)

A waiver of subrogation is an agreement in which one party gives up the insurer’s right to pursue another party for recovery after a loss. After an insurer pays a claim, it usually has subrogation rights to recover that amount from the at-fault party. By including a waiver of subrogation, the parties agree that those rights won’t be exercised against the other party, helping preserve business relationships and prevent cross-claims.

This clause is common in contracts like leases, construction agreements, or service contracts, where one party wants to avoid the possibility of being sued by the other or having to face subrogation actions that could complicate the relationship.

Hold harmless and indemnity provisions shift or allocate risk between parties, but they are not the specific mechanism for relinquishing subrogation rights. A release of claims settles who has claims going forward, but it doesn’t inherently describe the insurer’s right to subrogate after paying a claim.