Waiver of subrogation
An undertaking not to pursue a contracting party at fault, leaving the cost of the loss permanently with the first insurer to pay.
Deepwater Horizon, April 20, 2010, eleven dead. Between BP and Transocean, much of the litigation turned on the contractual allocation of loss, each party keeping its own whatever the fault. The Fifth Circuit ruled on subsurface pollution in 2014. Offshore oil contracts have run on this knock for knock basis since the 1970s. A waiver of subrogation is a party's undertaking, and its insurer's, not to pursue a counterparty, even one at fault. On a site with ten contractors, every incident would otherwise trigger as many cross claims, for a net result near zero once costs are paid. The clause holds only if the insurer consented. An insurer that has not waived will pursue recovery, and find that its policyholder gave away a right that was no longer the policyholder's to give. The shifted cost has to show up in the premium of whoever keeps the risk.
Since the 1970s, offshore oil contracts have run on knock for knock: each party keeps its own damage, whatever the fault. The Deepwater Horizon rig exploded on April 20, 2010, killing eleven people. The dispute between BP and Transocean then turned largely on that contractual split, and in 2014 the federal Fifth Circuit held that the waiver applied to subsurface pollution damage.
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