Subrogation Rights

a legal document on a desk with the word SUBROGATION as the headingAll insurance companies have subrogation rights. These rights can be an important part of the claims settlement process, but little is known about it actually means, outside of the industry.

What are subrogation rights?

Subrogation, subrogation rights, rights of subrogation. The term 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 policyholders 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 clients insurance company pays the claim and then seeks recovery of their payment from the third party who caused the loss.