Subrogation is the process by which an insurer, after paying a claim, takes over its insured's right to recover the money from whoever caused the loss. The Insurance Bureau of Canada defines it as the "legal process by which an insurance company, after the payment of a loss, is assigned the rights of the insured to recover."
Why It Matters for Snow Contractors
Subrogation is one of the ways a snow contractor ends up facing a claim from an insurance company rather than an individual. If a property owner's insurer pays for damage or an injury and believes your work caused it, the insurer may pursue you to recover what it paid.
It can also work in your favour. If your insurer pays for damage to your truck or equipment caused by someone else, it may pursue that party.
Contracts sometimes limit subrogation through a waiver of subrogation. Before you agree to one, ask a broker whether your policy allows it.
Example
A plow blade strikes a building's gas meter and the building owner's insurer pays for the repair. The insurer then brings a subrogated claim against the snow contractor. The contractor's general liability policy may respond to that claim, subject to its terms.
Related Terms and Guides
- Waiver of subrogation
- Snow removal claims guide
- Does snow removal insurance cover property damage?
General information only, not insurance or legal advice. Policy wordings differ; a licensed broker can explain how your own policy and contracts treat this.
Further reading: Insurance Bureau of Canada: Insurance glossary
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Frequently Asked Questions
Can an insurer sue me even if its own customer did not?
A subrogated claim is brought using the insured's rights, so it can arrive even when the property owner is not personally pursuing you.
What should I do if I receive a subrogation letter?
Report it to your broker or insurer promptly and do not admit fault before you speak with them.