Subrogation - What is it?

Subrogation in its most common usage refers to circumstances in which an insurance company tries to recoup expenses for a claim it paid out when another party should have been responsible for paying at least a portion of that claim.

More specifically, subrogation is the legal technique under common law by which the insurer, steps into their Insured’s shoes, so they have the benefit of their rights and remedies against a third party who is liable.

Subrogation arises in policies of insurance, but the legal technique is of more general application. In each case, because the Insurer pays money to their Insured which otherwise another party would have had to pay. The law permits the Insurer to enforce their rights against that other party to recover some or all of what the Insurer has paid out.

Although the basic concept is relatively straightforward, subrogation is considered to be a highly technical area of the law.

Subrogation – is an Insurers right

 The following is an example of a contractual clause in which one party has 'signed away' its rights against another:

"(Insured client A) hereby agrees to indemnify and hold harmless (another party B) in respect of any liability that (party B) incurs arising out of its contractual obligations contained in this agreement."

You should always review your contractual arrangements to ensure that you haven't 'signed away' an Insurer’s right to subrogation. You could be not only breaching the terms and conditions of your insurance policy but could be prejudicing the insurer’s position to make a legitimate recovery. If you have then you must disclose this fact to the insurer.

You should also check that you do not have any contracts or agreements where you have agreed to 'hold harmless' any of your clients or sub-contractors for loss (for which those parties might otherwise be responsible).

 Who can an insurer waive its right of subrogation against?

Notwithstanding the above, the insurer may waive its right of subrogation against:

  1. Any co-insured (including its directors, officers and employees); or
  2. Any corporation or entity (including its directors, officers and employees) owned or controlled by any insured or against any co-owner of the property insured.


Latest News

Three Years running - Insurance Brokerage of the Year 1 to 5 staff

Mandy and Robert Cooper were extremely honoured and astounded to once again win, Insurance Brokerage of the Year for 2020 from Insurance Business Australia magazine. This is the third year running.

While this year has not been the easiest of years for the business with Covid 19, the Recession, the hard market and issues at Lloyds of London, we are literally all in this together as an Insurance Industry.

CPR Insurance Services continues to make our clients the number one focus of our business while managing our relationships with Insurers, who we need more than ever in this market climate.

CPR Insurance Services are a highly ethical Brokerage with a reputation as a trusted advisor who always acts in the Client's best interests. Their experience, knowledge and expertise is amongst the highest in the industry.

CPR Insurance Services is now ten years old as a business and is proud of being an Authorised Representative of Ausure and their partnership with Steadfast, giving CPR the strength and backing to match it with any Broking firm in the Insurance Industry, but remain focussed on supporting the Small to Medium business segment.

Memberships of the National Insurance Brokers Association, Australia and New Zealand Institute of Insurance and Finance, Australian Insurance Law Association, Australian Professional Indemnity Group and the Australian Institute of Company Directors, ensures CPR Insurance Services maintains the high standard of knowledge and expertise required to be one of the best Brokerages in Australia.

CPR Insurance Services also plays a strong role in their local community supporting other Sporting Clubs and Community organisations. They also support and promote local businesses with their operation of the Kedron Brook Business Group who meet regularly and has 174 members.

We are truly honoured to receive this National award once again for the third year as a recognition of CPR Insurance Services contribution.

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Finalist for QLD Broker of the Year

Robert Cooper was honoured to be nominated as a finalist for Queensland Insurance Broker of the year for 2020, as part of the National Insurance Brokers Association. Unfortunately he missed out on the ultimate award but is a reflection of the high standard that the industry now has for such awards.

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