Complex and Large Loss Insurance Subrogation Actions

Posted in Legal Alerts on September 27, 2021

Insurance companies that cover large and complex losses typically include subrogation clauses in their policies to protect their assets and their policyholders. Subrogation clauses allow insurers to pay policyholder claims while also taking legal action against an at-fault third party or parties that caused the loss. To ensure subrogation is successful, it is within an insurance company’s best interests to work with experienced legal counsel that handles both commercial and personal insurance matters including losses that range in size up to well over six figures. A legal team can be most impactful during subrogation action when brought into the claims process from the beginning instead of waiting weeks or months to be involved. Taking immediate action on matters involving subrogation will assist carriers in securing a significant recovery to offset policyholder losses.

A common large loss scenario for a policyholder may stem from the catastrophic failure of a system installed by a third party or faulty product used. For example, an insured business owner may suffer a serious loss caused by an improperly installed or defective product that sparked a serious structural fire resulting in property damage and subsequent halt in business operations. This loss may be covered by their insurance policy and the policyholder will be paid for its resulting damages. The insurance company, through the use of a subrogation action, can then sue a responsible third party that improperly installed or manufactured the product that caused the structural fire. Because the actions of the installer and/or manufacturer can be considered negligent, the insurance company can recover the amount it paid out on its insured’s claim as damages to reimburse itself. This type of action will require legal assistance as a thorough investigation is necessary to uncover evidence to support the case and legal representation is also needed to file and proceed with the subrogation action.

There are many other common scenarios in which large or complex losses can lead to subrogation actions by an insurer. If policyholders experience a significant loss due to building fires, structural failures or collapses, construction defects, equipment failure, flooding, gas leaks, fire suppression failures, or plumbing failures, and one or more third parties are found to be at fault, a subrogation action can be pursued depending on the terms of the insurance policy.

How Experienced Subrogation Attorneys Facilitate Loss Recoupment

Accurate evaluations of losses for subrogation actions are essential for maximizing the insurer’s recovery. It is best to have a legal team that centralizes the oversight of all activities related to the recovery of funds so communication can be streamlined and the insurer can rest assured that their case is in good hands. A prime legal team will carefully review the matter, coordinate all investigations, consult with industry experts experienced in analyzing damages and losses – including complex structural and engineering concerns. An insurance and subrogation legal team can also work to identify all potentially responsible third parties involved and will collaborate with the insurer to craft the best and most cost-effective approach to maximize recovery. The insurer’s legal team can quickly get started on investigating the circumstances surrounding the loss and can bring in experts to determine exactly who is at fault.

Our legal team also assists insurers in pursuing medical payment coverage subrogation. This may be for reimbursement after an insurer has paid medical payment coverage after a bodily injury claim. This can involve complex circumstances that require specific legal knowledge in MPC subrogation. Many legal firms will do their best to resolve this type of subrogation matter outside of court while remaining ready to proceed with litigation if needed. When an insurance company chooses to pursue a third party for damages, it is essentially stepping into the shoes of the policyholder and thus holds the same rights and legal standing when seeking compensation for large losses. If the damages resulted from a situation that would not allow a policyholder to sue the third party for compensation, the insurance company will likewise not be able to proceed with subrogation actions.

Experienced Legal Representation for the Insurance Industry

Subrogation often involves complex legal issues and rights that are drastically different from one jurisdiction to the next. Contact Partners Stu Cohen and Todd Feldman for any subrogation-related questions. Our firm’s subrogation department is teamed by seasoned lawyers and leaders in the insurance coverage field. Our team of insurance attorneys are knowledgeable litigators with years of experience handling subrogation actions in a variety of courts across both states and we have secured significant recoveries for our clients in mediation and arbitration proceedings.

We have represented large national insurance companies and smaller property and casualty carriers operating throughout Florida and Georgia. Our team has a proven combination of skill and experience critical to maximizing carrier recoveries. Our attorneys are fully committed to working closely with our insurance industry clients to maximize subrogation recoveries from legally responsible third parties.  We handle complex and high-value subrogation claims for large insurers and reinsurers as well as more routine subrogation matters.