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Most ke y, you ve s gned a contract or been re- qu red to supp y a Cert f cate of Insurance wh ch g ves a “Wa ver of Subrogat on”, but what s t anyway? Why does t matter? And why the heck s Ky e engag- ng me on th s subject here n WWDR and tak ng me deeper nto the weeds-of- nsurance than I m n- c ned to go? We , p ease bear w th me, read through th s a t me or two, and I be eve you be the better for t. So here goes . . . “Subrogat on” s a process of f nanc a recovery after a oss. It s a bas c nsurance concept n nsur- ance po c es and most contracts. If a “bad day” happens and a oss occurs, t typ ca y happens through someone s neg gence. The neg gent “at-fau t” party s then ab e for the cost of the oss; and your nsur- ance carr er may then choose to sue the at-fau t party to recover the amount of a c a m they pa d to you or on your beha f . . . And th s s the process of f nanc a recovery known as “subrogat on”. A though you may not f nd the term subrogat on n every contract, understand t may be d sgu sed n the term no ogy as “Transfer of R ghts of Recovery Aga nst Others to Us”, wh ch some nsurance po c es use n p ace of the word “subrogat on”, but t s effectua y the same th ng. Therefore, when a wa ver of subrogat on s requ red n a contract, t means you are wa v ng your nsurance company s r ght to subrogate aga nst another ( .e. neg gent) party. Most common y th s s the party you are under contract w th. Most nsurance po c es, w th the except on of workers compensat on (remember, workers compensat on s no-fau t coverage anyway), a ow you to wa ve your r ghts of subrogat on as ong as t s done n wr t ng and pr or to the oss. Depend ng on how your nsurance po cy was des gned n t a y, you may or may not be requ red to endorse or spec f ca y refer to the exact contract, and there may or may not be added costs to do so. The va ue of a wa ver of subrogat on c ause p aced n a contract s there to m n m ze awsu ts and c a ms between the part es after a “bad day”. The ob gat ons of c a m, once ass gned to the nsurers by the part es who s gned the contract, s determ ned to stop there, w thout a ow ng the nsurer to seek re mbursement of costs from a th rd party. Thus t guarantees f a oss occurs, the nvo ved party s nsurer pays the c a m and the nsurance proceeds can be used to fund the cost of repa rs w thout de ays n determ n ng who was at fau t. In other words, w thout a wa ver of subrogat on, t gat on or arb trat on s frequent y needed to determ ne whose fau t caused a oss, wh ch can ead to a very ong and cost y ordea . Hence, subrogat on ex sts to protect nsured part es by free ng the nsurers to act sw ft y and effect ve y n pay ng osses, wh ch u t mate y trans ates nto better protect on and ower nsurance rates. If you have any quest ons, p ease reach out. I d ove to hear from you! Kyle Kyle Rehme may be contacted via e-mail to michele@worldwidedrillingresource.com Kyle Rehme uses his personal knowledge of the water well, drilling, and environmental in- dustries to provide cus- tomers with practical insurance solutions. The Theory and Practical Application of Sub-ro-ga-tion by Kyle Rehme VolkBell Property & Casualty Insurance, LLC , . *#! ' , , . &#," 1 0% "& 1 * ', &#," (%$ %% *() *,0 +- %,0 '+-* ' *#%% *+ 1 '- ,-* *+ 1 -))%# *+ 1'!#' *+ 1 ('+-%, ',+ 1 , * %% 1 ,"( # 1'.#*('& ', % 1 (," *& % 1 (' - ,(* (% *#%% *+ 1 #% # % *.# + 1 , * -&) *.# ) #* (',* ,(*+ /,(' * (*, (%%#'+ 8 OCTOBER 2016 WorldWide Drilling Resource ®