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What are subrogation rights?

All insurance companies have subrogation rights. These rights can be an important part of the claims settlement process, but outside of the insurance industry, little is known about what it actually means.

Subrogation, subrogation rights, rights of subrogation: These terms are used to describe the legal right of an insurance company to recover its loss from a third party. It is usually triggered where a claim payment is made to a policyholder, but the policyholder's loss was actually caused by another party. The insurer has the right to subrogate directly against the third party or their insurance company.

When is subrogation used in professional indemnity insurance claims?

In the context of professional indemnity insurance, an example is where a sub-contractor or consultant causes a loss while working for a larger client. The client's insurance company pays the claim and then seeks recovery of their payment from the third party who caused the loss.  

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