01 / The meaning
What it means.
If someone else caused the damage, the insurer may seek recovery from that party after paying or addressing the insured loss. This does not create better rights than the insured held. Evidence about responsibility, contract terms and causation can therefore matter even when the insured has already received a settlement. The timing and allocation of recoveries, including uninsured amounts or an excess, require separate consideration.
Contracts signed before an incident may waive or restrict recovery rights. A lease or service agreement should be reviewed with this in mind, particularly where the policy requires disclosure or consent. Do not release another party from responsibility, dispose of evidence or accept a final settlement without understanding the effect on recovery. An insurer’s recovery effort is different from a third party making a liability claim against your business.
02 / Put it in context
A practical example.
Hypothetical example: a delivery vehicle damages a business’s loading door. The property insurer assesses the door claim and investigates recovery from the operator. The business preserves footage and the delivery paperwork, and asks how any recovered excess would be handled.
This example illustrates the term. It does not predict a claim outcome.
03 / Read the detail
What to check.
- Review contractual waivers and indemnities that could affect recovery rights.
- Preserve incident evidence and obtain advice before releasing a responsible party.
- Ask how recoveries, legal costs and uninsured portions would be allocated.
04 / Start a useful conversation
A question for your broker.
Have we agreed to anything that restricts recovery from the party responsible for the loss?
05 / Connect the terms
Keep the meaning in context.
06 / Apply it to your business
Related insurance guides.
Further reading
Read the source guidance alongside the relevant policy wording.
General information only. This does not take into account your objectives, financial situation or needs. Before acting, consider whether the information is appropriate for you. Cover is subject to insurer acceptance and the policy terms, conditions, limits and exclusions. Read the Financial Services Guide and the relevant PDS (where applicable) and/or policy wording before deciding.
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