Recovery guide · 8 min read

Subrogation and recovery in marine claims

Updated 5 November 2026

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When an insurer pays a marine claim, it can step into the assured's rights and pursue the party responsible. That is subrogation, and the claim that follows is the recovery. This guide sets out the steps, the documents each step needs, who provides them and where recovery files usually have gaps.

How a recovery file is built

A recovery file grows in five steps. At payment, the insurer settles the claim with its assured and takes a subrogation receipt. At notice, the insurer or the assured tells the party that may be liable, often the carrier, and asks for a time extension. At evidence, the insurer collects what shows who had the goods or the ship when the loss happened and in what condition. At negotiation or proceedings, the parties talk, or the insurer sues before the time runs out. At settlement and allocation, the recovery is received and shared as the policy and the law provide.

The steps overlap, and the most important date is often set before payment. A file that is complete for one step can still be incomplete for the next, so check each step separately.

Invented example. A consignment of electrical equipment arrives with water damage. The consignee sends a claim to its cargo insurer with a survey report. The insurer pays and takes a subrogation receipt. It sends a notice of claim to the carrier, asks for a time extension and receives a short written reply. The carrier asks for the bill of lading and the delivery documents. The parties negotiate and settle for a part of the amount. Each of these steps leaves at least one document in the file.

What subrogation is

An insurer that pays a loss is entitled, up to the amount it has paid, to the rights of the assured against the party responsible for the loss. In English law this is set out for marine insurance in section 79 of the Marine Insurance Act 1906. In Italy it is article 1916 of the civil code, which gives the insurer who has paid the indemnity the rights of the assured against third parties responsible for the damage, up to the amount paid. Other legal systems have similar rules. The details, including what the insurer can pursue and in whose name, depend on the law that applies.

In daily work the two words mean different things. Subrogation is the insurer's right. Recovery is the claim the insurer brings, and the money it gets back. In cargo claims the typical target is the carrier. Others are terminal operators, stevedores, warehouse keepers and, after a collision, the other ship. The assured may also have its own uninsured loss, such as a deductible. The policy and the law decide how it is shared with the insurer.

A recovery step by step

The insurer checks the claim and the cover and, before paying, notes the time limits that may already be running against the party responsible.
The insurer pays the assured and takes a subrogation receipt or a letter of subrogation. The assured keeps its own copies of the documents.
The insurer, or the assured on its behalf, sends a written notice of claim to the carrier or other party. The notice describes the loss and says that the insurer claims in subrogation.
The insurer asks for a written extension of the time for suit and files the reply. If there is no reply, the insurer plans to sue within the time.
The insurer collects the evidence: the contract of carriage, the delivery documents, the survey report, photographs, and the carrier's own records where it can get them.
The insurer sends the carrier a claim with the amount and the documents. The carrier replies, asks questions or denies the claim.
The parties negotiate. If they do not agree, and the time is running out, the insurer starts proceedings.
On settlement, the insurer receives the recovery and signs a release. The recovery is allocated and the file is closed.

The checklist by stage

Document	Who provides it	What it shows	Stage
Policy or certificate of insurance, with clauses	Insurer, assured or broker	The cover and conditions, including any duty to protect recovery rights	Payment
Claim form and proof of loss	Assured	The loss, its amount and the interest of the assured	Payment
Survey report and photographs	Surveyor, assured	Condition of the goods or ship, cause of the loss and extent of the damage	Payment and evidence
Proof of payment and settlement advice	Insurer	What was paid, to whom and when	Payment
Subrogation receipt or letter of subrogation	Assured, signed on payment	That the assured has been paid and the insurer takes its rights up to that amount	Payment
Bill of lading, charter party or other contract	Carrier, shipper, consignee	The contract of carriage, its terms and any limits on liability	Notice and evidence
Commercial invoice and packing list	Assured, seller	Value and description of the goods	Notice and evidence
Delivery documents: delivery order, delivery receipt, notes made at delivery	Carrier, consignee, terminal	Date and place of delivery, the condition noted and who received the goods	Evidence
Container and seal records, temperature records, tally sheets, where relevant	Carrier, terminal, shipper	What happened to the goods between loading and delivery	Evidence
Notice of claim to the carrier or other party	Insurer or assured	When and how the other side was told of the loss	Notice
Time extension request and the written reply	Insurer; other party	Whether the time for suit has been extended, to what date and on what terms	Notice
Claim with supporting documents	Insurer	The amount claimed and the documents behind it	Negotiation
Correspondence with the carrier, its insurer and lawyers	Insurer, carrier, lawyers	Positions taken, offers made and dates	Negotiation
Writ or request for arbitration, where used	Insurer, lawyers	That proceedings were started and when	Proceedings
Settlement agreement and release	Parties	The amount agreed and the end of the claim	Settlement
Proof of the recovery received and its allocation	Insurer	What came in, what it cost to get it, and how it was shared	Settlement

Time and the notice of claim

The time to bring a recovery usually runs from the delivery of the goods or from the event, not from the day the insurer pays. A claim that was paid late may already be close to its time bar, or past it. So the time limits belong in the file before payment. Our guide on time bars in cargo claims sets out where the periods come from and how a written extension works. The period depends on the contract and the law, so confirm it for your claim.

Notice of claim to the carrier or its agent, in writing, with the date it was sent and how.
Time extension requested in writing and answered in writing. A silent carrier has not agreed.
Diary of the dates the time runs out, kept with the file.
Evidence secured early, before records are overwritten or goods are disposed of.

Protecting the right of recovery

Policy conditions and the law usually require the assured not to prejudice the insurer's rights against the party responsible. In Italy article 1916 makes the assured liable to the insurer for harm done to the right of subrogation. In practice this means the assured should not release the carrier, sign a clean receipt for damaged goods, accept a limit on liability without telling the insurer or let a time bar run. The insurer should say so to the assured early. The file should show what the assured did and when.

Settlement and allocation

A recovery rarely equals what was paid. The carrier may rely on a package limit, a defence in the contract or a lack of evidence, and the parties often settle for a part. The costs of recovery come off the amount received. Where the assured bore part of the loss, for example the deductible, the policy and the law decide how the recovery is shared. Keep the settlement, the release, the proof of receipt and the calculation of the allocation together.

Common gaps in a recovery file

No subrogation receipt, or one without the date and amount of payment.
A notice of claim sent but not acknowledged, and no record of how it was sent.
No written extension, and nobody tracking the date the time runs out.
The bill of lading or charter party missing, or a version that is not the one issued.
Delivery documents without the notes made at delivery.
Photographs without date and place, or goods disposed of before inspection.
Earlier versions of the claim or the survey report lost once a revised one has arrived.
The allocation of the recovery between insurer and assured not recorded.

Not legal advice. This checklist describes common practice. The right of subrogation, the parties that can be pursued, the time limits and the allocation of a recovery depend on the policy, the contract of carriage and the law that applies. Check them for each claim and take advice from your lawyer or a specialist recovery adviser where needed.

FAQ

What is the difference between subrogation and recovery?

Subrogation is the insurer's right to take over the assured's claim once it has paid. Recovery is the claim it then brings against the party responsible, and the money it gets back.

Who can an insurer recover from?

From any party that is liable to the assured for the loss. In cargo claims that is often the carrier. It can also be a terminal operator, a stevedore, a warehouse keeper or another ship. Whether the party is liable, and up to what limit, depends on the contract and the law.

When must the insurer act?

As early as it can. The time to sue usually runs from delivery or from the event and not from payment. Ask for a written extension, and keep the reply with the file.

Can the assured settle with the carrier itself?

Not safely. A release given to the carrier can prejudice the insurer's rights, and the policy may make that a breach. The assured should tell the insurer before it settles or signs anything.

Dossima files these documents into one claim file per claim, keeps every version and shows what is still missing, including a notice or an extension you have not yet confirmed. The decision stays with you.

Sources

Public sources this guide relies on. Check the current text before you rely on a rule.