17.1 Introduction

In the insurance context, the doctrine of subrogation means that where an insured event is caused by a third party, after the insurer has indemnified the insured's loss as required by the policy, it is entitled to step in the insured's shoes and enforce the insured's right to sue the third-party wrongdoer. The primary purpose of the doctrine of subrogation is to prevent the insured from being over indemnified for a loss from the insurance payout and any compensation paid to him by the third party for the same loss. This hinges on the indemnity nature of insurance contracts.1