Page 27 - Representation & Warranties Insurance

Subrogation RWI policy would be the insurer pursuing a fraud claim
Upon payment of an insurance claim, most RWI policies against a seller. If the insurer does attempt to pursue
provide the insurer with certain subrogation rights, in a subrogation claim against a party, the RWI policy
which the insurer may be able to pursue claims against typically requires the insured to take reasonable efforts
the party that originally caused the insured’s losses. to preserve the insurer’s subrogation rights. In such
With respect to RWI, such losses typically relate to instances, the insurer frequently is required to reimburse
representations made by the seller in the underlying the insured for costs it incurs aiding the insurer in
transaction agreement. As such, subrogation would this process.
often relate to losses resulting from the seller breaching
representations; however, RWI policies typically permit
the insurer to subrogate against the seller only in
instances where the seller commits fraud. Accordingly,
the most typical subrogation action associated with an

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