CG 24 04: Waiver of Transfer of Rights of Recovery Against Others to Us

What a waiver of subrogation does on a liability policy

Subrogation lets an insurer that pays a claim step into its insured's shoes and pursue whoever else caused the loss. On a construction project, that other party is often the general contractor or the owner. CG 24 04 is the endorsement in which the subcontractor's general liability carrier agrees not to do that: it waives its right of recovery against the person or organization shown in the schedule.

A waiver is not additional insured status. Additional insured status gives you coverage under the subcontractor's policy. A waiver keeps the subcontractor's carrier from coming after you for losses it paid. Contracts usually require both, plus parallel waivers on workers compensation (WC 00 03 13), business auto (CA 04 44) and umbrella or excess policies, because each carrier can only waive its own rights.

The endorsement protects only parties shown in its schedule. The schedule can name entities, or describe them, for example persons or organizations as required by written contract executed before the loss. A blanket description is easier to administer, but it only works if your contract actually requires the waiver.

How CG 24 04 comes into play after a loss

Waiver disputes rarely start with a tender. They start months later, when the subcontractor's carrier has paid a claim and its recovery counsel sends a demand to the general contractor or files suit. A carrier pays a third party injured near a subcontractor's hoist and then seeks contribution from the general contractor for site logistics. Or it pays for damage to an adjoining building and pursues the owner over shoring design decisions.

Your defense is the waiver. Recovery counsel will check whether the endorsement was on the policy in force, whether you fall within the schedule, and, under the 12 19 edition, whether the subcontractor waived its own rights against you before the loss. If any of those links is missing, the waiver fails and you are defending a recovery action funded by an insurer that may have collected premium for the waiver it is now ignoring.

CG 24 04 edition comparison: 05 09 and 12 19

The 05 09 edition waives recovery against the scheduled party for payments for injury or damage arising out of the named insured's ongoing operations or "your work" done under a contract with that person or organization and included in the products-completed operations hazard. It attaches to the Commercial General Liability and Products/Completed Operations coverage parts. The phrase "under a contract with that person or organization" raised the question of whether the protected party had to be in direct contract with the named insured.

The 12 19 edition removes that privity phrase and attaches to more coverage parts, including Liquor Liability, Pollution Liability designated sites, Railroad Protective and Underground Storage Tank. It also adds a condition: the waiver applies only to the extent the insured has waived its right of recovery against the scheduled party before the loss. In the same filing ISO introduced CG 24 53, an automatic waiver for parties the insured agreed in a written contract to waive. Older exhibits sometimes still cite pre-2009 editions by number; the 05 09 and 12 19 editions are what carriers issue.

What to require in the subcontract

Because the 12 19 edition depends on the insured's own waiver, the subcontract has to do two things. First, the subcontractor must waive its rights of recovery against the owner, general contractor and the other indemnitees, at least to the extent of insurance. Second, the subcontractor must cause each of its insurers to waive subrogation by endorsement. A subcontract that only says "provide a waiver of subrogation endorsement" leaves the 12 19 condition unsatisfied.

• An express waiver of claims by the subcontractor in the subcontract body, effective before work starts.
• CG 24 04 (05 09 or 12 19) or CG 24 53 on the general liability policy, scheduling the required parties by name or by written contract description.
• Matching waivers on workers compensation (WC 00 03 13 or the state form), business auto (CA 04 44) and umbrella or excess policies.
• Waivers that apply to ongoing operations and products-completed operations.

How Pikorua Security verifies the waiver chain

Pikorua Security checks waivers as a set. Rule WS-01 requires a general liability waiver page (CG 24 04, CG 24 53 or an approved carrier form), Rule WS-02 requires the workers compensation waiver for the state where the work is done, and Rule WS-03 requires the auto waiver when the contract calls for one. A "Y" in the SUBR WVD column of the ACORD 25 does not satisfy any of them on its own.

The validator reads the schedule to confirm the protected parties match your contract, and flags descriptions narrower than the contract, such as a schedule naming only the general contractor when your exhibit also protects the owner and lender. For 12 19 editions, Pikorua Security links the endorsement to the waiver clause in the subcontract you uploaded, so the record shows the insured's pre-loss waiver next to the carrier's.