Subrogation is a common law doctrine that allows an insurer who has indemnified its insured to step into the shoes of the insured and recover the loss from the wrongdoer. It is a well-established principle of insurance law that has been applied by South African courts for over a century.
In that light, the Road Accident
An indemnity policy constitutes a contractual agreement in terms of which the insurer indemnifies the insured in the event of a loss. The policy is neither intended to unjustifiably enrich nor undercompensate the insured. Its primary purpose is to restore the insured to their prior financial position subject to indemnity limits and avoid double indemnity.
This United Kingdom judgment dealt with the issue of co-insurance under project construction all-risk policies, and the extent of cover when facing a subrogated claim from the project insurers. It depends on the terms of the project contract.
The Rugby Football Union (RFU), as the employer insured under the CAR policy, engaged CSP
This blog was co-authored by: Anika de Kock, associate and Zinhle Mdluli, candidate attorney
The doctrine of subrogation literally means the substitution of one party for another as creditor. The doctrine is an incidence of the law of indemnity. The Court would allow the insurer to do so “in the name of the insured
Where project-wide cover was taken out for a construction contract for extensions to a school but the roofing contractor was obliged to take out its own insurance, it was held that the roofing contractor who caused a fire and a loss of £8.75 million was not entitled to the benefit of the project-wide insurance.
The
A neat description of subrogation appears in a recent UK case:
‘The concept of subrogated rights is well known. If a party is insured against an insured risk, and that risk eventuates and causes loss, the insurer will make good to the insured party the loss suffered as a result of the occurrence of the
In two UK cases the court confirmed that, when there is an underlying contract between parties who may become liable to each other but who take out insurance as part of their deal, the agreement is likely to be construed as being an agreement to insure for the joint benefit of both parties. It follows
The principle is trite that an insurer who pays the insured’s loss so that the insured receives a full indemnity has the right to step into the insured’s shoes and bring an action against the person responsible for the insured’s loss.
Many policies also now provide for contractual subrogation even in circumstances where a complete