Subrogation

Subrogation is the insurer’s right, on paying a claim, to step into the assured’s shoes and pursue any recovery the assured could have brought against a third party responsible for the loss. In cargo claims it is the mechanism by which the cargo underwriter, having paid the consignee, sues the carrier in the assured’s name within the one-year Hague-Visby time bar. It rests on the indemnity principle: the assured may not keep both the insurance proceeds and a damages recovery for the same loss.