Subrogation

May 3, 2011

Most D&O policy forms contain a subrogation provision within the Conditions section stating that when an insurer has made payment for a loss, it assumes the insured's right to collect damages from another party who may be ultimately responsible for the loss. The insurer is said to be “subrogated” to the insured's rights and remedy of collection. The insurer's right of subrogation is generally independent of other policy provisions. Even when policies are silent on subrogation, courts have upheld the insurer's right to subrogate.