Construction Law

Subrogation Waiver Covers The Entire Loss, Not Just "The Work"

By Timothy Gordon

Copper Mountain, Inc. v. Industrial Systems, Inc. (Colo. App. 2007)

Creating a split in the Colorado Court of Appeals, a division of the Court held that the subrogation waiver in AIA A201 covers any damage to the building, not just loss to the work being performed.

In this case, the project was for renovations to a ski lodge.  During performance of the work, a fire occurred, damaging portions of the existing lodge.  According to the Court, the owner, who entered into a standard AIA A201 contract, waived all claims for damages against the contractor and subcontractor to the extent those damages were covered by insurance.  Therefore the waiver is not limited to just the "Work" as defined by the contract, but also covered damage to the existing ski lodge.

The Court acknowledged that another division of the Court of Appeals, in Town of Silverton v. Phoenix Heat Source System, Inc., 948 P.2d 9 (Colo. App. 1997), held that the subrogation waiver was limited to claims for damages to the work only.

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Full post as published by Colorado Construction Law on November 29, 2007 (boomark / email).