4 Onstream Show me the money $15bn 800% The expense of a thorough subrogation program is paid back up to eight times. Upwards of $15 billion in subrogration opportunities are missed each year. If you called experienced, large loss subrogation counsel at the outset of the claim because they were part of a subrogation best practices program at your company, you could have answered that question with at least some degree of knowledge. Several more weeks pass. The insured has projected production to start in five months. With insurers’ approval, the adjuster hired forensic accountants as well as cost/design engineers. The insurers have a much better understanding of the range of the claim’s gross value. The insured promises to share a root cause analysis once completed. (It must first be approved by several in-house constituencies and outside counsel.) The adjuster heard that a contractor was near the site of the initial explosion. The adjuster is trying to learn more about the cause of the loss and hired a cause and origin investigator. The insured provides very little new information to the investigator who, as a generalist, does his best to identify the more apparent causes of the loss. There is a brief discussion between insurers about subrogation counsel, but given the assumed costs and whether there is subrogation potential in the first place, you go along with the rest of the insurers and decide to wait until you have more information before making that decision. You report the status of the loss and the exposure your syndicate or company now may have. At the end of that conversation, your boss asks “So, how does subrogation look?” Hmmm. What now? If you called experienced, large loss subrogation counsel at the outset of the claim because they were part of a subrogation best practices program at your company, you could have answered that question with some degree of certainty. Several months pass, and the claim looks like it will conclude amicably. A compromise on the business interruption losses is reached with the insured. The property damage was repaired more quickly and for less than what was originally expected. The insured released its root cause report which, on balance, blames itself for the loss. The insured’s adjusting firm just met with the forensic accountants and the cost engineers. Both experts are satisfied, within reason, that the current calculations are accurate. Walking back to your office from the last meeting of insurers involved with the loss, you happily think to yourself that this was a successful and cost-effective adjustment. Payment will issue in a few weeks. All parties should be satisfied with the resolution, especially one less than ten months after the loss itself. Just as you enter the doors to your building, you then think, “Oh, wait, my supervisor is going to ask me about subrogation. What now?” Getting on your mobile, you call the lawyers you have met a few times on other matters, who are located in the immediate jurisdiction of the refinery and who told you, among other things, they have tried a few subrogation cases. They promise to look into it and get back to you. If you had called experienced, large loss subrogation counsel at the outset of the claim because they were part of a subrogation best practices program at your company, you could have answered that question at this stage of the claim with significant confidence. Two more months pass and you get the substantive report from counsel. Unfortunately, they report that the insured has, in essence, moved on from the loss after they received payment on the claim. The insured now is not sure where the critical physical evidence is located, but it is likely one of the contractors who was onsite took possession of it and replaced it quickly (with the consent of the insured) so the facility could get back into operation promptly. Employees who interacted with the potentially at-fault contractors have been re-assigned and cannot locate their notes. The regulatory bodies involved have just published their © 2013 Xchanging