“It's a lonely place under the bus all by yourself.” This saying sums up the concept of subrogation and our attempts to identify other potentially responsible parties. Subrogation describes both the legal and equitable right of an insurer to pursue a third party that caused an insurance loss to the insured. When an insurer pays a claim, the insured assigns all rights to recovery to the insurer, who may then “step into the shoes” of its insured and attempt to recover the monies paid from a third party.

However, numerous complications can arise. For example, an auto accident could have elements of negligence or strict liability on the part of the drivers, mechanics who worked on the vehicles, product liability claims for the auto manufacturer or component part manufacturers, computer programming errors, municipalities responsible for roadway maintenance or signage, etc.

Subrogation supports the principle of social equity/justice (i.e., not allowing the at-fault party to escape responsibility). It also supports the principle of indemnity by serving to prevent the policyholder from recovering in excess of the actual damages (i.e., policyholder cannot recover under the insurance contract and then seek double recovery by pursuing the at-fault party for the same damages, since the policyholder's rights of recovery against the at-fault party will have been assigned to the insurer via the subrogation clause of the insurance policy).