The waiver of subrogation can be a valuable tool for all parties involved in a construction contract, and it remains to be seen how this provision will affect those parties. Among other things, waivers of subrogation frequently help parties settle disputes by bringing finality to a settlement, ensuring that no third parties or their insurers will come back to seek further reimbursement for the same loss in the future. The waiver of subrogation occurs where parties to a contract waive claims against each other, but only to the extent those claims are covered by insurance. Frequently, a party to a construction contract will also waive claims against an architect, owner, or general contractor, even where those entities are not a party to the agreement.
The benefits of the law are not entirely clear. Although the bill was initially introduced in a dramatically different form and touted as an equalizer for subcontractors bargaining with powerful general contractors, the final bill underwent numerous revisions and appears to benefit insurance companies most of all.