In the context of insurance, “subrogation” isthe legal or equitable principal by which a carrier “steps into theshoes” of its insured after having made payment on a claim. The artof subrogation is an opportunity for a carrier to recover moneypaid under its policy and allow the ultimate burden of a loss to beborne by the responsible party. Subrogation is not an economical orviable pursuit on all losses. However, with prompt and thoroughinvestigation and awareness of both legal and practical road blocksto recovery, the effort can be performed economically while addingsignificant amounts of money back to the bottom line of thecompany. To attain these efficiencies and to posture a lossappropriately, the art of subrogation requires experience and, attimes, true creativity.

Subrogation takes many forms. It can involve a loss relating tocommercial or residential property, machinery and equipment,automobile, fidelity, cargo, marine, or inland marine, to name justa few. As much as each type of coverage has its nuances,subrogation in each of these categories brings with it vastlydifferent investigation processes and potential recovery pitfalls.By having experienced subrogation professionals on hand to conductearly investigations into recovery potential, you can quicklymonetize the “low hanging fruit” as well as help to weed out thoselosses that do not justify further time or investment. The earlyassessment then allows efforts to be properly focused where thepotential for recovery exists, but where the issues or amount incontroversy might not lend themselves to quick recovery. Thosefiles require additional skill and development to get across the“finish line.”

The process will always begin with identifying what happened andlooking for potential theories of recovery under the circumstances.These opportunities could be afforded under theories including:breach of contract; warranty; workmanship issues including designand construction defects; products liability; spread andexacerbation of damages; and even under obscure state and federalstatutes. With every potential theory there are also variouspitfalls that must be navigated as they can differ slightly, orsignificantly, from one jurisdiction to another. By way of example,the Economic Loss Doctrine, the Made Whole Doctrine, a statute ofrepose (or prescription), or the threshold for spoliation ofevidence, take various forms in different jurisdictions. The statespecific application of these issues can be carefully navigated insome states with experienced handling, but could completely gut theviability of a recovery in others.

Your House Counsel, being a consortium of lawfirms located around the country, is poised perfectly to assistcarriers of all sizes and with differing in-house capabilities ordepartments and different product lines, all to streamline theirsubrogation efforts across the board. By not only having anattorney aware of state specific laws or rules which may impactrecovery potential, Your House Counsel memberfirms are truly local and understand local prejudice and nuancesthat may not be appreciated or accounted for in national programs.And when time is precious, you can further rest assured that eachYHC member firm has been vigorously evaluated and has met thestringent requirements of being invited to join the YourHouse Counsel team.

By having local representation for your subrogation needs, theidentification and application of applicable state and federal law,the identification of respected and qualified experts, and theearly and prompt investigation and information gathering can behandled for you or alongside your day-to-day claims processes. Asanyone who has practiced in the subrogation field can attest, itcan be hard at times to juggle duties to insureds on the promptadjustment of their claim and also focus the requisite energy onprotecting your subrogation rights. By allowing subrogationspecialists to focus on the investigation and preservation of thoserights, avoiding the loss of critical evidence through the passageof time, and securing local cooperation where necessary,subrogation can become a huge profit generator for yourcompany.

Randall J. Poelma, Jr. is from Your House Counsel's member firmof Doyen Sebesta in Houston, Texas.