An undertaking not to pursue a contracting party at fault, leaving the cost of the loss permanently with the first insurer to pay.
A waiver of subrogation is an undertaking by a party, and by its insurer, not to pursue a contracting counterparty even where that party is at fault. Its logic is to remove a costly round trip: where several firms work on one site, every incident would trigger as many cross claims as there are participants, for a net outcome often close to zero once legal costs are deducted. Each then keeps its own damage and insures it for its own account, what oil and marine contracts call the knock for knock principle. The clause has effect only if the insurer consented, since an insurer that has not waived will pursue recovery despite its policyholder's undertaking, and then finds that its policyholder gave away a right that was no longer theirs. Its counterpart is a permanent shift of cost, which must show up in the premium of whoever keeps the risk. The problem solved is the friction cost of shared responsibility between partners who need to go on working together.
Offshore oil contracts have applied the knock for knock principle since the 1970s, each party keeping its own damage whatever the fault. After the Deepwater Horizon rig explosion of April 20, 2010, which killed eleven people, that contractual split lay at the heart of the dispute between BP and Transocean, the federal Fifth Circuit holding in 2014 that the waiver applied to subsurface pollution damage.
renonciation à recours, clause knock for knock