1. Forms
2. CA
3. CA-04-44

Form CA 04 44: Waiver Of Transfer Of Rights Of Recovery Against Others To Us (Waiver of Subrogation)

1. What the form is

The CA 04 44 endorsement is a crucial component of a Commercial Auto policy. Its primary purpose is to waive the insurer's right to subrogate against a specific third party. Subrogation is the legal right of an insurer, after paying a loss to its insured, to step into the shoes of the insured and recover that payment from the at-fault third party. When the CA 04 44 is added to a policy, the insurer contractually agrees not to pursue recovery from the person(s) or organization(s) named in the endorsement's schedule for payments made under the policy for auto liability or physical damage claims. This waiver is typically required by a written contract between the insured and the third party before any accident or loss occurs. The endorsement modifies the "Transfer Of Rights Of Recovery Against Others To Us" condition found in standard commercial auto coverage forms like the Business Auto Coverage Form (CA 00 01).

2. Classes of business it applies to

The CA 04 44 is utilized across a wide array of industries where contractual relationships necessitate one party to waive subrogation against another. Common scenarios include:

• Construction Projects: General contractors often require subcontractors to have their auto insurer waive subrogation against the general contractor and/or project owner. This prevents the subcontractor's insurer from suing the general contractor if, for example, an employee of the subcontractor causes an accident on the job site for which the insurer pays, but the general contractor may have some shared responsibility.
• Leasing and Rental Operations: Businesses that lease or rent vehicles to others may require the lessee to provide a waiver of subrogation. For instance, a company leasing a fleet of trucks to a delivery service would want this waiver to prevent the delivery service's auto insurer from seeking recovery from the leasing company for accidents caused by the delivery drivers.
• Service Agreements: Companies hiring other businesses for services involving vehicle use, such as transportation or delivery, often mandate this waiver. A manufacturing company hiring a trucking firm to transport its goods might require the trucking firm's insurer to waive subrogation against the manufacturer.
• Municipal or Government Contracts: Businesses contracting with city, county, or state entities are frequently required to provide a waiver of subrogation in favor of the governmental body. For example, a snow removal company contracted by a city would likely need to have its auto insurer waive subrogation rights against the city.

This endorsement can be attached to various commercial auto coverage forms, including the Business Auto Coverage Form, Business Auto Physical Damage Coverage Form, Garage Coverage Form, Motor Carrier Coverage Form, and Truckers Coverage Form.

3. Special considerations

Several important points must be considered when using the CA 04 44:

• Pre-Loss Contractual Requirement: The waiver of subrogation is typically only effective if it's required by a written contract entered into before the accident or loss occurs. Attempting to add the waiver after a loss to protect a third party will generally not be permissible.
• Scheduled Entities Only: The CA 04 44 is a "scheduled" endorsement, meaning it only applies to the specific person(s) or organization(s) listed in the endorsement's schedule. If a party is not listed, the insurer retains its subrogation rights against them. It's crucial to ensure the correct legal names of all required parties are accurately listed.
• Impact on "Who Is An Insured": While this endorsement waives recovery rights, it doesn't automatically make the scheduled party an "insured" under the policy for all purposes. Additional insured status is typically conferred through separate endorsements.
• State-Specific Rules: While the form is widely applicable, some states may have specific regulations or interpretations affecting subrogation. For example, Texas has specific rules regarding the approval of certificate forms that may reference waivers of subrogation.
• Alternative Endorsement CA 04 43: ISO has introduced a newer endorsement, CA 04 43 - Waiver Of Transfer Of Rights Of Recovery Against Others To Us (Waiver Of Subrogation) - Automatic When Required By Written Contract Or Agreement. This form provides an automatic waiver when a written contract requires it, potentially eliminating the need to schedule each entity individually. However, the CA 04 44 remains in use, particularly when a specific, scheduled waiver is preferred or required.
• No Benefit to Unscheduled Parties: The endorsement explicitly states that the waiver shall not operate directly or indirectly to benefit anyone not named in the schedule.

4. Key information for agents and underwriters

Agents and underwriters should be mindful of the following when dealing with the CA 04 44:

• Pricing/Premium Considerations: Insurers may charge an additional premium for adding a waiver of subrogation endorsement. This is because the insurer is giving up a potential avenue of cost recovery. The premium surcharge can vary by insurer and the nature of the risk. For example, the New York Automobile Insurance Plan stipulates a percentage surcharge for adding this endorsement.
• Risk Assessment: Underwriters need to assess the increased risk exposure when subrogation is waived. If the party for whom subrogation is waived has a poor loss history or operates in a high-risk environment, the likelihood of the insured's policy having to pay without recovery increases. The underwriter will consider the nature of the relationship between the insured and the party named in the schedule, and the potential for shared liability.
• Contractual Review: It is best practice for agents to advise insureds to provide copies of contracts requiring a waiver of subrogation. This allows the agent and underwriter to verify the requirement and ensure the endorsement is completed accurately. Understanding the scope of the work being performed under the contract is also vital for proper risk assessment.
• Coverage Gaps: Failing to add a contractually required waiver of subrogation can lead to a breach of contract for the insured, potentially resulting in legal and financial consequences. Agents should proactively discuss contractual insurance requirements with their clients.
• Documentation: Proper documentation is essential. The schedule on the CA 04 44 must clearly and accurately identify the person(s) or organization(s) for whom subrogation is waived. The endorsement should be made effective from the appropriate date, typically the policy inception or the date the contractual requirement begins.
• Interaction with CA 00 01: The CA 04 44 directly modifies the subrogation condition within the CA 00 01 Business Auto Coverage Form (and other relevant coverage forms). It's important to understand how these forms interact to accurately explain coverage to the insured.