Subrogation in construction
Subrogation is the substitution of one person in the place of another in relation to a claim. That is, one person (the subrogee) ‘steps into the shoes’ of the other (the subrogor) and is assigned with all their rights and remedies.
Subrogation commonly arises in construction in relation to insurance policies, where the insurer will often need the right to step into the shoes of the insured in order to pursue a claim against a third party with a contractual obligation to the insured. This allows the insurer to attempt to recover the cost of the compensation they may have paid to the insured. By assigning their rights and remedies, the insured is prevented from pursuing a claim against the third party themselves, although if the insurer recovers more than the compensation (plus expenses) they will generally pass this back to the insured.
It is not uncommon in construction to be asked to change insurance policies to waive subrogation rights; ie, the insurer agrees not to pursue a claim to recover compensation they have paid out. For example, a main contractor might demand that a sub-contractor waive their subrogation rights against them. This, in effect creates a no fault insurance scheme which inevitably results in increased premiums.
NB Insurance Policyholder Taxation Manual, published by HM Revenue & Customs on 19 March 2016, defines subrogation as: ‘the right of one person to stand in the place of another and avail him/herself of the rights and remedies of that other person, whether already enforced or not (for example, the right of an insurer who has indemnified a claimant to seek compensation from the person who caused the insured damage).’
[edit] Related articles on Designing Buildings
Featured articles and news
UK Infrastructure: A 10 Year Strategy. In brief with reactions
With the National Infrastructure and Service Transformation Authority (NISTA).
Ebenezer Howard: inventor of the garden city. Book review.
The Grenfell Tower fire, eight years on
A time to pause and reflect as Dubai tower block fire reported just before anniversary.
Airtightness Topic Guide BSRIA TG 27/2025
Explaining the basics of airtightness, what it is, why it's important, when it's required and how it's carried out.
Construction contract awards hit lowest point of 2025
Plummeting for second consecutive month, intensifying concerns for housing and infrastructure goals.
Understanding Mental Health in the Built Environment 2025
Examining the state of mental health in construction, shedding light on levels of stress, anxiety and depression.
The benefits of engaging with insulation manufacturers
When considering ground floor constructions.
Lighting Industry endorses Blueprint for Electrification
The Lighting Industry Association fully supports the ECA Blueprint as a timely, urgent call to action.
BSRIA Sentinel Clerk of Works Training Case Study
Strengthening expertise to enhance service delivery with integrated cutting-edge industry knowledge.
Impact report from the Supply Chain Sustainability School
Free sustainability skills, training and support delivered to thousands of UK companies to help cut carbon.
The Building Safety Forum at the Installershow 2025
With speakers confirmed for 24 June as part of Building Safety Week.
The UK’s largest air pollution campaign.
Future Homes Standard, now includes solar, but what else?
Will the new standard, due to in the Autumn, go far enough in terms of performance ?
BSRIA Briefing: Cleaner Air, Better tomorrow
A look back at issues relating to inside and outside air quality, discussed during the BSRIA briefing in 2023.
Restoring Abbotsford's hothouse
Bringing the writer Walter Scott's garden to life.
Reflections on the spending review with CIAT.
Retired firefighter cycles world to raise Grenfell funds
Leaving on 14 June 2025 Stephen will raise money for youth and schools through the Grenfell Foundation.
Key points for construction at a glance with industry reactions.
Comments
[edit] To make a comment about this article, or to suggest changes, click 'Add a comment' above. Separate your comments from any existing comments by inserting a horizontal line.