Subrogation Claims And Arbitration Clauses In Construction Contracts

In Texas, while an insurer can assert a subrogation claim independently of its insured, the insurer still stands in the shoes of its insured, meaning the insurer's claims are limited to those the insured could bring and are subject to the same defenses.  A common defense when a loss involves a construction project is that subrogation has been waived in the construction contract.  The application and enforceability of a waiver of subrogation clause depends on the specific contract language, but common industry waivers (such as the standard AIA waiver of subrogation clause) are generally upheld and enforced under Texas law to preclude insurers' subrogation claims.  It makes sense then that a subrogated insurer pursuing a claim against a contractor could also be subject to any dispute resolution provisions agreed to by its insured in the construction contract, including arbitration clauses.