What is the CG 2404 Endorsement?
The CG 2404, also known as Waiver of Transfer of Rights of Recovery Against Others to Us, is a commonly used waiver of subrogation endorsement (WOS endorsement) in commercial general liability (CGL) policies. This waiver of subrogation form allows the named insured to waive their insurer’s right to subrogate against a person or organization with whom they have a contractual relationship.
In practical terms, when this transfer of rights of recovery is in place, the insurance carrier cannot seek reimbursement from another party—even if that party was responsible for a covered occurrence that resulted in injury or damage. The waiver of rights of recovery is critical for many industries, including construction, real estate, and manufacturing, where written contracts often require this waiver.
If you would like a sample of the CG 2404, it can be located on the bottom of this article where you can view and save it.
| Factor | Key Points | Action Steps |
|---|---|---|
| Construction | Building materials, design, building codes | Row 1, Content 2 |
| Occupancy | Purpose of operation | Identify new tenants or operational shifts |
| Protection | Fire systems, security, local services | Check inspection records and test logs regularly |
| Exposure | Nearby hazards, weather, neighborhood changes | Update data as conditions change |
Why is the CG 2404 Endorsement Important?
Many businesses are required by written contract to provide a waiver of subrogation in favor of another person or organization, such as a general contractor or property owner. The cg2404 endorsement ensures compliance with contractual obligations, covering both ongoing operations and products-completed operations hazard requirements.
Without this waiver of subrogation form (PDF Linked), an insurer might pursue subrogation against the responsible party, potentially damaging business relationships and leading to legal complications. The CG 2404 endorsement provides clarity and ensures that the waiver applies as documented in the schedule or declarations of the policy.
How the CG 2404 Endorsement Works
When included in a commercial general liability coverage part (CGL form), the CG 2404 modifies the transfer of rights of recovery against others to us condition.
Here’s how it functions:
- Applies Only When Required by Written Contract: The endorsement activates when the insured has agreed in writing to waive subrogation rights prior to loss.
- Limits the Insurer’s Right of Recovery: The insurer cannot seek repayment from the person or organization named in the contract, even if that party’s negligence contributed to the occurrence causing injury or damage.
- Typically Includes Named Parties: The waiver only applies to persons or organizations specifically identified in the insured’s written contract. It does not offer a blanket waiver of subrogation form for all third parties.
Common Misconceptions About the CG 2404
- It Covers All Third Parties Automatically
Some policyholders assume that once the cg2404 endorsement is added, subrogation is waived against everyone. This is incorrect—it applies only to persons or organizations specified in the insured’s written contract.
- It Eliminates Liability for the Responsible Party
The endorsement does not absolve third parties of legal liability for your work. Instead, it only prevents the insurer from seeking reimbursement. The injured party (insured) may still pursue legal action against the person responsible or organization if allowed by contract.
- It is Standard in All CGL Policies
The waiver of subrogation form cg2404 is not automatically included in commercial general liability coverage parts. It must be explicitly requested and endorsed onto the policy, often with specific details included in the schedule or declarations.
Practical Considerations for Insurance Professionals
When to Recommend the CG 2404 Endorsement
- When an insured is contractually obligated to waive subrogation (common in lease agreements, construction contracts, and service agreements).
- If maintaining business relationships is a priority over recovering funds through subrogation.
- When subcontractors require this waiver to comply with agreements from project owners or general contractors for ongoing operations and products-completed operations hazard requirements.
Potential Downsides and Risk Management Strategies
- Carefully review contracts to ensure the CG 2404 endorsement is applied only where necessary for ongoing operations and products-completed operations hazard.
- Discuss the implications with insureds, particularly regarding premium impacts and potential uninsured losses.
- Advise insureds to require similar waivers from their subcontractors and vendors to prevent one-sided risk assumption for your work.
- Provide a waiver of subrogation template to help insureds understand the language and implications of such agreements.
Final Thoughts
The cg2404 endorsement is crucial in managing contractual risk and maintaining strong business relationships. Insurance professionals must understand when and how to apply this waiver of subrogation form to ensure compliance while balancing financial risks. By reviewing written contracts and educating policyholders, agents and brokers can provide informed recommendations that protect their clients’ interests while minimizing unnecessary exposures for both ongoing operations and products-completed operations hazard.
Understanding the differences between a waiver of subrogation vs waiver of transfer of rights is also essential for insurance professionals. While they appear similar, key nuances affect coverage and legal implications. Consulting legal counsel is advisable when dealing with complex contractual requirements and endorsements like the CG 2404, particularly regarding Section IV – Conditions of the CGL form and its interaction with various coverage parts and endorsements.
