Under the terms of many insurance policies, the insurer has a right of subrogation which permits the insurer to seek recovery from a third party who is responsible for the insured loss. “Subrogation: Primer and Recent Environmental Cleanup Cases,” New York Law Journal, Volume 253, No. 95 (May 19, 2015). The Court of Appeals has recognized this right on a number of occasions, acknowledging that the insurer can “‘stand in the shoes’ of its insured to seek repayment from a third party whose wrongdoing caused the loss to the insured which the insurer was obligated to cover.” Jefferson Insurance Co. of New York v. Travelers Indemnity Company, 92 N.Y.2d 363 (1998). The purpose of subrogation, according to the Court of Appeals, is to “allocate responsibility for the loss to the person who in equity and good conscience ought to pay for it … .” Millennium Holdings v. The Glidden Company, 27 N.Y.3d 406 (2016).

The anti-subrogation rule, as one might expect from the title, imposes a limitation on the insurer’s right to subrogate. Under that rule, promulgated by the Court of Appeals in 1986, an insurer may not bring a subrogation claim against its own insured for a claim arising from the risk for which the insured was covered under the insurance policy. Pennsylvania Gen’l Ins. Co. v. Austin Powder, 510 N.Y.S.2d 67 (1986).

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