In the context of insurance, “subrogation” is the legal or equitable principal by which a carrier “steps into the shoes” of its insured after having made payment on a claim. The art of subrogation is an opportunity for a carrier to recover money paid under its policy and allow the ultimate burden of a loss to be borne by the responsible party. Subrogation is not an economical or viable pursuit on all losses. However, with prompt and thorough investigation and awareness of both legal and practical road blocks to recovery, the effort can be performed economically while adding significant amounts of money back to the bottom line of the company. To attain these efficiencies and to posture a loss appropriately, the art of subrogation requires experience and, at times, true creativity.

Subrogation takes many forms. It can involve a loss relating to commercial or residential property, machinery and equipment, automobile, fidelity, cargo, marine, or inland marine, to name just a few. As much as each type of coverage has its nuances, subrogation in each of these categories brings with it vastly different investigation processes and potential recovery pitfalls. By having experienced subrogation professionals on hand to conduct early investigations into recovery potential, you can quickly monetize the “low hanging fruit” as well as help to weed out those losses that do not justify further time or investment. The early assessment then allows efforts to be properly focused where the potential for recovery exists, but where the issues or amount in controversy might not lend themselves to quick recovery. Those files require additional skill and development to get across the “finish line.”

The process will always begin with identifying what happened and looking for potential theories of recovery under the circumstances. These opportunities could be afforded under theories including: breach of contract; warranty; workmanship issues including design and construction defects; products liability; spread and exacerbation of damages; and even under obscure state and federal statutes. With every potential theory there are also various pitfalls that must be navigated as they can differ slightly, or significantly, from one jurisdiction to another. By way of example, the Economic Loss Doctrine, the Made Whole Doctrine, a statute of repose (or prescription), or the threshold for spoliation of evidence, take various forms in different jurisdictions. The state specific application of these issues can be carefully navigated in some states with experienced handling, but could completely gut the viability of a recovery in others.