Transfer of Rights of Recovery

March 21, 2011

In the BAP, CA 00 01, under the Transfer of Rights of Recovery Against Others to Us clause, who is the “person or organization” referring to? Is it the named insured? Is it others? If so, who would that be?

I always took the wording to mean that the named insured's rights of subrogation are transferred to the insurance company. But others in the office thought the “person or organization” referred to others such as an additional insured.

What is your opinion?

Pennsylvania Subscriber

The key word in the transfer of rights of recovery clause is the word “any”. This means that any person or organization—that is, the named insured, other insureds, claimants—any person or organization to whom or for whom the insurer makes a payment. If that person or organization has rights of recovery against another entity, the insurer then has those rights transferred to it.