In this case, Seneca Specialty Ins. Co. v. Jade Condominium Assoc'n a unit owner sued its association and another unit owner claiming that water flowing from limited common areas within the association’s control damaged its balcony.
Liability insurance policies have a provision that allows them to subrogate to the rights of their insured. This provision is commonly referred to as a transfer of rights provision and reads:
If the insured has rights to recover all or part of any payment we have made under this Coverage Part, those rights are transferred to us. The insured must do nothing after loss to impair them. At our request, the insured will bring “suit” or transfer those rights to us and help us enforce them.
In a recent dispute, an insurer sued its insured claiming the insured breached the insurance policy-a contract—by impairing the insurer’s subrogation rights. In other words, the insurer claimed its insured breach the insurance contract and the transfer of rights provision above.
Mr. Adelstein may be contacted at dma@kirwinnorris.com
