- Project plans
- Project activities
- Legislation and standards
- Industry context
Last edited 14 Aug 2014
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.
 Find out more
 Related articles on Designing Buildings Wiki
Featured articles and news
Organisations will collaborate on infrastructure initiatives.
Technology informs procurement and planning practices.
BSRIA releases market sector growth projections.
Designing for durability and resilience.
Do plans to connect infrastructure and housing stack up?
1 minute review of CAMRA’s guide to historic drinking dens.
Their complex heritage remains largely unknown.
New editor covered facilities management, operations and construction in the US.
Exclusive log cabins on the North Antrim coastline.
Proactive forestry for strategic water management.