Subrogation

Subrogation is the mechanism by which an insurer, having indemnified its insured, is vested with the rights that the insured held against the third party responsible for the damage, and may therefore bring a recovery action to recoup all or part of the amount paid. It serves two fundamental functions of fairness. It prevents the insured from being indemnified twice, once by their insurer and once by the responsible party, which would breach the indemnity principle. It places the ultimate cost of the loss on the party truly at its origin, rather than on the pool of insureds, thereby preserving third parties' incentive to be careful. The subrogated recovery is an important economic component of insurers' results, since amounts recovered reduce the net claims burden. In cyber, subrogation takes on particular significance when a loss originates in a provider's failure, a negligent host, the vendor of a vulnerable piece of software or a compromised supplier, against whom the insurer may seek to turn, then raising complex questions of apportioning liability in technical chains where fault is diffuse.

Having indemnified an insured victim of a data leak caused by the negligence of its hosting provider, the insurer brings a subrogated recovery action against that provider to recoup the sums paid, thereby transferring the ultimate burden to the party truly responsible.

recours subrogatoire, subrogation de l'assureur