Contracts & ExecutionQuestion 547 of 690
A subcontract requires the sub to name the prime contractor and owner as ADDITIONAL INSUREDS on the sub's commercial general liability policy AND to provide a WAIVER OF SUBROGATION. The PRIMARY purpose of the waiver of subrogation is to:
a.Increase the policy limits available to the prime
b.Prevent the sub's insurer from suing the prime to recover what it paid out on a covered loss caused by the prime
c.Allow the sub to be released from indemnity obligations
d.Require the prime to pay the sub's premium
Explanation
A waiver of subrogation prevents the insurance carrier, after paying a loss, from stepping into the insured's shoes and pursuing the prime (or owner) for reimbursement. Combined with additional-insured status, it shifts risk fully to the sub's carrier without circular litigation.
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