Subrogation
Subrogation is the principle by which an insurer, having paid a claim to its insured, takes over the insured's rights to recover the loss from the party actually responsible for it. Having compensated the policyholder, the insurer “steps into their shoes” and can pursue the at-fault third party (or their insurer) to recoup what it paid.
In cargo and marine insurance this is central: when a cargo insurer pays a client for goods damaged in transit, it then pursues the carrier, terminal or other party at fault under subrogation to recover the amount. Subrogation ensures the burden of a loss ultimately falls on the responsible party, not just on the insurer, and prevents the insured from recovering twice (from both insurer and wrongdoer). It is why insurers require the insured to preserve rights of recovery — for example by holding the carrier liable and not signing away claims. Subrogation underpins the flow of liability behind cargo claims and is a routine but important mechanism in marine and transport insurance.
Subrogation is why a paid insurance claim isn't the end of the story — the insurer then chases whoever actually caused the loss, so liability lands where it belongs. It is why insurers insist the insured preserve claims against the carrier, and it drives the recovery battles behind cargo claims. Understanding it explains how transport liability really flows.
What does subrogation allow an insurer to do?
After paying its insured, pursue the party responsible for the loss (such as a carrier) to recover the amount it paid.
Why must the insured preserve rights of recovery?
So the insurer can exercise subrogation against the at-fault party; signing away claims against the carrier can prejudice the cover.