D
Dolemite
Member
Hi, I'm hoping someone will help clear this up in my mind.
I am going through the solution for Q3 on the 2018-04 SP7 paper:
(ii) State with a reason whether subrogation is likely to be material for each class, giving an example if appropriate:
(c) Employers’ Liability
The solution says subrogation is unlikely to be material.
My attempt said that:
- Subrogation will be substantial under this liability class.
- The insurer will be responsible for defending the employer from any legal action taken against it.
- For example, employees may sue an employer for exposure to asbestos in the workplace and resulting health complications.
- The insurer will take on these liabilities and will be responsible for the defence.
- There are unlikely to be any recoveries under this class as there is no property to sell, just the transfer of liabilities.
I am struggling to understand why subrogation wouldn't apply to this class. The definition of subrogation is that "it is the substitution of one party for another as a creditor, with a transfer of rights and responsibilities".
Under an EL claim, is the insurer not liable for compensating the claimant (hence there is a transfer of rights and responsibilities)?
Thanks,
Dolemite.
I am going through the solution for Q3 on the 2018-04 SP7 paper:
(ii) State with a reason whether subrogation is likely to be material for each class, giving an example if appropriate:
(c) Employers’ Liability
The solution says subrogation is unlikely to be material.
My attempt said that:
- Subrogation will be substantial under this liability class.
- The insurer will be responsible for defending the employer from any legal action taken against it.
- For example, employees may sue an employer for exposure to asbestos in the workplace and resulting health complications.
- The insurer will take on these liabilities and will be responsible for the defence.
- There are unlikely to be any recoveries under this class as there is no property to sell, just the transfer of liabilities.
I am struggling to understand why subrogation wouldn't apply to this class. The definition of subrogation is that "it is the substitution of one party for another as a creditor, with a transfer of rights and responsibilities".
Under an EL claim, is the insurer not liable for compensating the claimant (hence there is a transfer of rights and responsibilities)?
Thanks,
Dolemite.