March 2013 3 Subrogation best practices in the energy market or, how to answer the question: What now? by Todd B. Denenberg & Paul B. Hines Denenberg Tuffley, PLLC New loss notification – Without a best practices approach; or, Business as usual The new loss notification just appeared on your screen. You have a significant portion of a large claim at a North American refinery. The broker has limited information, but it is likely the facility will not be back in production for months. Government investigators are involved. A portion of the facility is too dangerous to enter. A few days pass. The insured’s downstream vendors suffer contingent business interruption losses and submit claims. Lawyers for the injured employees want to inspect the facility and threaten suit. The diligent adjuster, despite being onsite, was unable to gather any more facts because the local occupational health and safety agency closed the relevant portion of the facility. The risk manager is reluctant to share, or concerned about sharing, information with insurers because of a potential coverage issue (at least in the insured’s eyes). The insured’s operation and finance staff are busy calculating how to get the facility back in production again as soon as possible and how much production will be lost in the meantime. You are in the process of completing the initial paperwork; your supervisor asks: “So, what do you think about subrogation on this one?” Hmmm. What now? Todd B. Denenberg © 2013 Xchanging