When an insurer pays a claim to its policyholder, known as 'the insured', that is rarely the end of the story. Often, a third party, such as a negligent contractor, driver, or supplier, caused the insured's loss.
Subrogation enables insurers to recover those losses from the third party.
This article explains how subrogation works, who it applies to, why solicitors are often involved, and what happens when claims cross jurisdictional borders. We also explain the key court decisions that shape how subrogation operates in practice.
What is subrogation?
Subrogation means that once an insurer has indemnified the insured, the insurer is entitled to pursue any responsible third party to recover the amount it has paid out under the policy. In practical terms, this means:
