1. Forms
2. CA
3. CA-04-43

What the form is

The CA 04 43 endorsement, titled "WAIVER OF TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO US (WAIVER OF SUBROGATION) – AUTOMATIC WHEN REQUIRED BY WRITTEN CONTRACT OR AGREEMENT," modifies the standard Business Auto Policy (BAP), Auto Dealers Coverage Form, or Motor Carrier Coverage Form. Its primary function is to automatically waive the insurer's right of subrogation against a third party if the insured has agreed to such a waiver in a written contract that was executed before an accident or loss occurs. Subrogation is the legal right of an insurer, after paying a claim, to pursue the party responsible for the loss to recover the amount paid. This endorsement makes the waiver of this right automatic when contractually obligated, removing the need to individually schedule each party for whom subrogation is waived.

Classes of business it applies to

This endorsement is broadly applicable to any business that carries commercial auto insurance (e.g., Business Auto Policy, Auto Dealers Coverage Form, Motor Carrier Coverage Form) and enters into contracts requiring them to waive their insurer's subrogation rights against other parties. This is common in many industries.

• Real-world example: A delivery company contracts with a large retail chain. The contract requires the delivery company's insurer to waive subrogation rights against the retail chain for any auto-related incidents. Attaching the CA 04 43 to the delivery company's Business Auto Policy automatically fulfills this contractual requirement for covered auto losses.
• Real-world example: A general contractor hires subcontractors for a construction project. The contracts between the general contractor and subcontractors often include clauses where each party agrees to waive subrogation rights against the others for losses covered by their respective insurance policies, including auto claims. The CA 04 43 helps ensure the auto policy complies with these agreements.

Special considerations

• Timing is crucial: The written contract or agreement mandating the waiver of subrogation must be in place before the "accident" or "loss" happens for this endorsement to apply. Agreements made after a loss will not trigger this automatic waiver.
• Automatic vs. Scheduled: This endorsement provides an automatic waiver when a qualifying contract exists, unlike the CA 04 44 (Waiver of Transfer of Rights of Recovery Against Others To Us), which requires specific persons or organizations to be listed (scheduled) in the endorsement. The CA 04 43 is more efficient for insureds who frequently enter into contracts with waiver of subrogation clauses.
• Contractual Requirement: While the standard Business Auto Coverage Form (CA 00 01) generally allows an insured to waive their recovery rights before a loss without invalidating coverage, some third parties specifically require an endorsement like the CA 04 43 as proof of the waiver.
• Legal Limitations: The enforceability and scope of a waiver of subrogation can sometimes be limited by state law.

Key information for agents and underwriters

• Pricing/Premium: Adding this endorsement may involve a premium charge, as it restricts the insurer's ability to recover claim payments from at-fault third parties. Underwriters must evaluate this potential increase in net loss exposure.
• Risk Assessment: Underwriters should understand the nature of the insured's business and the types of contracts they routinely sign. If the insured frequently contracts with entities where the potential for significant auto liability is high, and subrogation would typically be a viable recovery option, the risk is greater.
• Clarity of Contracts: Agents should advise insureds to ensure their contracts clearly stipulate the requirement for a waiver of subrogation and that these contracts are executed before any work begins or potential for loss arises.
• Underwriting Diligence: Underwriters might request to review sample contracts to understand the scope of waivers the insured agrees to. It's important to confirm that the insured has good contractual risk management practices.
• Purpose: This endorsement simplifies compliance with common contractual requirements, reducing the administrative burden of scheduling individual waivers and minimizing the risk of inadvertently failing to meet a contractual obligation.