Subrogation

Subrogation is the right to “step into the shoes” of a third party (such as a creditor or an insurance company) and assume their right to collect a debt or damages. Subrogation is an equitable remedy, having first developed in the English Court of Chancery. It is a familiar feature of common law systems. In project finance, subrogation is generally encountered in the area of insurance, where insurers are typically required by lenders  to waive their right of subrogation so that they do not pursue any potential claim against any party to recover any insurance proceeds which they have paid out..