8 Insurance & Liability

Question 1

What is Subrogation and when may it arise?

Answer 1

• Subrogation is the substitution of one person in the place of another in relation to a claim.
• it commonly arises in relation to insurance policies where the insurer will often need the right to step into the shoes of the insured in order to pursue a claim against a third party with a contractual obligation to be insured

Question 2

Why is Subrogation required?

Answer 2

• allows insurers to attempt to recover the cost of the compensation they may have paid to the insured
• often insurance policies are requested to be changed to waive Subrogation rights ie. The insurer agrees not to pursue a claim to recover compensation they have paid out. Eg. A main contractor may demand that a subcontractor waive their Subrogation rights against them.