A property owner tried to recover damages from a fire that occurred during courthouse repairs by suing the contractor, claiming the subrogation waiver in their AIA contract only covered construction-related damage. The Indiana Supreme Court ruled that subrogation waivers in AIA contracts bar recovery for all damages covered by the owner's property insurance policy, regardless of whether the damage relates to the construction work itself. This 'any insurance' approach means if the owner's insurance covers it, the owner cannot sue the contractor for it—even non-construction damage. Subcontractors benefit because they're protected from liability for a broader range of incidents once a subrogation waiver is in place.
If your contract includes an AIA standard form with a subrogation waiver, you are protected from owner claims for any damage covered by the owner's property insurance—not just work-related damage.
Make sure your contract clearly incorporates the AIA language about waiving subrogation rights 'to the extent covered by property insurance' to get maximum protection under Indiana law.
Verify that the owner has property insurance in place before work begins; the waiver's scope depends on what their policy actually covers.