Legal Definitions - subrogor

A subrogor is an individual or entity who originally possessed a legal right to pursue a claim or recover a loss from a third party, but who then transfers that right to another party (known as the subrogee). This transfer typically occurs after the subrogor has been compensated for their loss or debt by the subrogee. In essence, the subrogor is the original claimant who steps aside, allowing the subrogee to step into their shoes and pursue the claim against the party responsible for the loss.

• Damaged Goods in Transit

  Imagine a small business ships a valuable consignment of electronics, which gets severely damaged due to mishandling by the shipping carrier. The business has cargo insurance. After the insurance company pays the business for the full value of the damaged goods, the business then transfers its right to sue the shipping carrier for negligence to the insurance company.

  How this illustrates the term: In this scenario, the small business is the subrogor. They originally had the right to claim damages from the shipping carrier. However, once their insurance company compensated them for the loss, they transferred that right to the insurer, thereby becoming the subrogor.

• Surety Bond in Construction

  A city government hires a construction company to build a new public library. The construction company provides a performance bond from a surety company, guaranteeing the project's completion. If the construction company defaults and abandons the project, the city makes a claim against the surety company, which then pays the city to cover the costs of completing the library with another contractor. The city then transfers its right to recover these costs from the defaulting construction company to the surety company.

  How this illustrates the term: The city government acts as the subrogor. It initially held the right to sue the defaulting construction company for breach of contract. Upon receiving payment from the surety company, the city transfers this right to the surety, making the city the subrogor.

• Employee Embezzlement and Fidelity Insurance

  A financial firm discovers that one of its employees has embezzled a significant sum of money over several months. The firm has a fidelity insurance policy that covers losses due to employee dishonesty. The insurance company investigates the claim and pays the financial firm for its losses. The financial firm then transfers its right to pursue legal action against the embezzling employee to the insurance company.

  How this illustrates the term: Here, the financial firm is the subrogor. It originally had the legal standing to sue its dishonest employee to recover the stolen funds. After being compensated by its fidelity insurer, the firm transfers this right to the insurer, thereby becoming the subrogor.