A $1 million fire at an Amazon warehouse put insurance waivers and risk allocation clauses under the spotlight in a recent Indiana appellate ruling.
On September 30, 2025, the Court of Appeals of Indiana decided a dispute stemming from a construction project at an Amazon warehouse in Plainfield, Indiana. Amazon.com Services, LLC and Bryan Builders, LLC had a master agreement that required Amazon to maintain an all-risk property insurance policy covering the interests of all project participants, including contractors and subcontractors. The agreement also included a subrogation waiver, meaning Amazon and Bryan Builders waived the right to pursue claims against each other and any subcontractors or sub-subcontractors for damages covered by property insurance.
In January 2022, Bryan Builders hired Steel Services, Inc. as a subcontractor, and Steel Services engaged Fair Family Corporation for welding work. In June 2022, a fire broke out during Fair Family’s work, causing about $1 million in damage. Bryan Builders paid for emergency cleanup and repairs. Because the loss was less than the $35 million deductible on Amazon’s all-risk policy, the insurer did not pay anything.
Bryan Builders then sought reimbursement from Steel Services, Fair Family, and their insurers, The Cincinnati Casualty Company and Atlantic Casualty Insurance Co. The insurers denied liability, citing the subrogation waiver in the master agreement. Litigation followed.
The trial court granted summary judgment to the insurers and subcontractors, finding that the subrogation waiver barred Bryan Builders’ claims. On appeal, the Court of Appeals affirmed this outcome. The appellate court explained that the waiver applied because the damage was within the scope of the property insurance coverage, even though the insurer did not pay due to the deductible.
The court specifically noted that the waiver was triggered by the existence of coverage under the policy, not by whether the insurer actually paid a claim. The judges also found that the subcontracts and insurance policies held by the subcontractors did not override the master agreement’s risk allocation or the effect of the subrogation waiver.
This decision confirms that in commercial construction, subrogation waivers in master agreements can prevent parties from seeking reimbursement from each other for losses covered by property insurance, even if the loss falls within a large deductible and no insurance payment is made. The ruling underscores the importance for insurance professionals to review contract language closely, as these clauses can significantly affect claims and recovery after a loss.
