Learn about subrogation in insurance
When you experience a covered loss, your insurance is there to help you recover while protecting your bottom line. But what happens when someone else is responsible for that loss? That’s where subrogation comes in.
Understanding how subrogation works can help business owners and risk managers protect their businesses, avoid unnecessary expenses, and help ensure the at-fault party is held financially responsible.
What is subrogation in insurance?
Subrogation is the process that allows your insurance company to recover money from the party responsible for a loss. Put simply, when your insurer pays for your claim, they may then pursue reimbursement from the person—or their insurer—who was actually at fault.
How the subrogation process works
The subrogation process usually begins after your insurer pays your claim. Once payment is made, your insurer can pursue recovery against the at-fault party or their insurance company. This process typically involves claims adjusters who gather evidence and determine fault. The insurance provider’s legal teams may also get involved if formal recovery efforts are required.
While your insurer manages the process, you may be asked to provide details, documentation, or testimony that support recovery efforts.
Why subrogation matters in business insurance claims
Subrogation protects policyholders in three important ways:
Ensures accountability
Allows the claim to be paid to the insured in a more timely fashion
Removes the burden from the insured of having to individually pursue the other party/insurer
In short, subrogation helps keep the claims process fair, efficient, and cost-effective.
Common examples of subrogation in action
To see how subrogation might affect your business, consider these hypothetical scenarios:
Commercial auto insurance: One of your company vehicles is hit by another driver. Your insurer pays for repairs, then seeks repayment from the at-fault driver’s insurer.
Commercial property insurance: A fire damages your facility due to faulty wiring installed by a contractor. Your insurer covers the repairs, then pursues recovery from the contractor’s insurance company.
Working with Sentry on claims and subrogation
At Sentry, our goal is to make the claims process as smooth as possible while helping protect your business’s financial interests. Our experienced adjusters and claims teams handle subrogation efforts on your behalf, so you can focus on running your business with confidence.
Learn more about how we support businesses at every stage of a claim by visiting our Claims Center.
The information contained in this document is of a general nature, and neither that information nor the hypothetical loss example included in this document is intended to address the circumstances of any particular individual, entity, or set of facts. Legal obligations may vary by state and locality. No one should act on the information contained in this document without legal advice from competent and licensed local professionals.
THE INFORMATION CONTAINED IN THIS DOCUMENT IS DISTRIBUTED BY SENTRY “AS-IS,” WITHOUT ANY WARRANTIES. SENTRY WILL HAVE NO LIABILITY TO ANY PERSON OR ENTITY WITH RESPECT TO ANY LOSSES OR DAMAGES CAUSED, OR ALLEGED TO HAVE BEEN CAUSED, DIRECTLY OR INDIRECTLY BY THIS DOCUMENT, REGARDLESS OF WHETHER SUCH CLAIM IS BASED ON CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE AND FOR PROPERTY DAMAGE AND DEATH), OR OTHER GROUNDS.
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