Restriction on Subrogation Sample Clauses

A Restriction on Subrogation clause limits or prohibits an insurer’s right to pursue recovery from third parties after paying out a claim to the insured. In practice, this means that once the insurer compensates the policyholder for a loss, the insurer cannot seek reimbursement from other parties who may have contributed to or caused the loss, unless specific exceptions apply. This clause is commonly used to prevent disputes between parties who have ongoing business relationships or to avoid undermining contractual risk allocations. Its core function is to protect certain parties from being targeted for recovery actions, thereby maintaining the intended distribution of risk and liability under the contract.