The general conditions of a contract governing the construction of a shopping mall stated:

". . . .The Owner shall purchase and maintain property insurance upon the entire Work at the site to the full insurable value thereof. The insurance shall include the interests of the Owner, the Contractor, Subcontractors and Sub-subcontractors in the Work and shall insure against the perils of fire and extended coverage and shall include 'all risk' insurance for physical loss or damage including, without duplication of coverage, theft, vandalism and malicious mischief. . . .

". . . .The Owner and the Contractor waive all rights against (1) each other and the Subcontractors, Sub-subcontractors, agents and employees each of the other, and (2) the Architect and separate contractors, if any, and their subcontractors, sub-subcontractors, agents and employees, for damages caused by fire or other perils to the extent covered by insurance obtained pursuant to (the above paragraph) or any other property insurance applicable to the Work, except such rights as they may have to the proceeds of such insurance held by the Owner as trustee. . . ."

The owner's builders risk insurer paid in excess of $400,000 for damage by fire to the roof and top floors of the mall's office tower. Asserting its subrogation prerogative, the insurer sued a roofing subcontractor, whose alleged negligence caused the fire damage. It appealed a trial court jury verdict in favor of the roofer, based upon the waiver of subrogation provision.

The evidence had established that the project owner had entered into a contract with a major contractor to serve as general contractor for the construction of the mall and office tower. The latter, in turn, entered into a subcontract with another contractor for the construction of the office tower. That firm subcontracted with the roofing contractor for the construction of the roof.

The owner's insurer argued that, by terms of a subcontract, the roofer agreed to hold harmless the contractor and owner from damage to or destruction of property. It contended that this provided a basis for subrogation against the roofer.

The roofing contractor maintained that the subcontract under which it operated was "in harmony" with the owner's "General Conditions of the Contract for Construction." It said that the trial court, by directing a verdict, "correctly determined that as a matter of law (the insurer) had contractually waived its right of subrogation against (the roofing contractor)."

The appeal court said: "The waiver of subrogation clause prevents disruption and disputes among parties to a construction project and eliminates lengthy lawsuits. All parties are protected because all

property damage is brought under the builders risk policy." The judgment of the trial court was affirmed in favor of the roofing contractor and against the mall owner's insurer.

(INDUSTRIAL RISK INSURERS, Appellant v. GARLOCK EQUIPMENT COMPANY ET AL., Appellees. Alabama Supreme Court. Nos. 89-1079, 89-1115. February 8, 1991. CCH 1991 Fire and Casualty Cases, Paragraph 3072.)