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ARTICLE · 18 DECEMBER 2023

Subrogation Rights In R&W Insurance Policies

Herbert Smith Freehills Kramer LLP
Herbert Smith Freehills Kramer LLP
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Herbert Smith Freehills Kramer LLP

Herbert Smith Freehills Kramer LLP

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The volume and size of insurer payments under R&W insurance policies are increasing. According to a May 2023 Aon study...

United StatesInsurance
Arthur Aufses III
Arthur Aufses III
Lee Turner Friedman
Lee Turner Friedman
Jennifer S. Windom
Jennifer S. Windom
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The volume and size of insurer payments under R&W insurance policies are increasing. According to a May 2023 Aon study, the average R&W insurance claim payment to Aon clients in 2022 was $9 million, "significantly higher than the average claim payment in each of the previous two years." Aon, 2023 Transaction Solutions Global Claims Study, at 22. In addition, according to Aon, the frequency of claims on deals worth more than $100 million increased from prior years. Id. at 8, 29. As claim payments continue to rise, insurers may be looking for tools to mitigate losses. Subrogation can be one such tool, particularly when an identifiable third party is clearly responsible for the insured's loss. This article explores some of the factors that insurers should consider when deciding whether to pursue subrogation.

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