Duty to Cooperate After Insurance Subrogation

An insured may still have cooperation obligations after an insurer pays a claim and pursues recovery from a responsible third party. The source and scope of that duty must be found in the policy and applicable law. It can include preserving evidence, providing documents or testimony, and avoiding a release that destroys the insurer’s recovery rights. A misstep does not produce one automatic Canada-wide consequence; wording, timing and actual prejudice matter. Subrogation allows an insurer to pursue rights connected to an insured loss. Under the common law described by the Supreme Court of Canada in Somersall v. Friedman, subrogation ordinarily arises after the insured has been fully indemnified, but the insurance contract can alter that position. The duty to cooperate is usually contractual. Read the subrogation, cooperation, proof-of-loss, action-against-insurer, recovery and settlement provisions together.