Waive Or Do Not Waive Subrogation, But There Is No Try

A recent federal case provided an excellent example that not all supposed waivers of subrogation are, in fact, waivers.

In National Surety Corp., et al. v. Bozeman, 2022 WL 953053, No. 1:20-cv-01187-WJM-GPG (D. Colo. March 30, 2022), National Surety filed a subrogation action alleging the defendant -- the owner of the unit where the fire originated -- was liable for damages caused by the fire’s spread to the common elements of the condominium building.

National Surety insured the condominium association (the ‘Association’). The parties agreed that an Association declaration providing that the Association’s board of directors would obtain insurance for the condominium building and common improvements applied to the Association and the individual unit owners.

The declaration additionally stated, ‘[t]he Board of Directors shall make every reasonable effort to obtain policies…containing the following…the insurer waives its right of subrogation as to any claim against each unit owner.’ (emphasis added).

The board of directors for the Association obtained insurance from National Security that actually affirmed the carrier’s right of subrogation and did not include any waiver against the Association’s unit owners.