An insured is entitled to be made whole, which means, generally, being paid all legally recognized and recoverable damages for the injury or loss sustained, a somewhat illusive standard. After paying a claim, the insurer will often seek to recover from a responsible third party through subrogation. In a common scenario, the “made whole” number is less than the amount the policyholder is paid by its insurer, and then the insured and insurer litigate their rights and priorities in the funds recovered by the insurer.

Sometimes, however, the insured, not the insurer, is able to recover from a third party. The question arises of whether the insurer, having partially paid only for covered losses, can share in the policyholder’s recovery. The issue is increasing in frequency as insurers search for ways to recoup claim losses. Resolving this issue requires careful attention to the recovery allocation provisions of the relevant policies, as well as the many different types of releases, waivers, and other devices.

Listen as our authoritative panel of attorneys guides counsel through the issues related to the insured’s recovery of third-party funds.