Subrogation: persons protected by insurance

It is trite law that insurers do not possess subrogation rights against a person who is insured under the policy for the loss in question. That point typically arises where the primary assured, A, agrees with B to insure in their joint names. In that situation it was confirmed by the Court of Appeal in Gard Marine & Energy Ltd v China National Chartering Co Ltd [2015] EWCA Civ 16 that the contract between A and B is to be construed as removing A’s right to claim against B where the loss is one that would have been covered by the policy, so that there are no rights to which the insurers can be subrogated.

However, in some situations, although there is an agreement that A will insure for the benefit of B, B is not made a party to the insurance. In that situation subrogation becomes a live issue. The question is whether the agreement to insure is itself enough to confer immunity upon B. The question was discussed by Holgate J in Frasca-Judd v Golovina [2016] EWHC 497 (QB).