Simply stated, subrogation is the process of getting money back for a loss incurred due to the actions of a third party.   As a member of VML Insurance Programs, for you, subrogation means an indirect savings and in many cases, a direct savings.  The indirect savings is realized through reduced loss amounts on both workers’ compensation claims and property & liability claims, resulting in more favorable premiums.  The direct savings is seen when we reimburse you (our member) directly for policy deductible amounts recovered on property & liability claims.

During the 2006 benefit year, we recovered more than $1,000,000 of losses through the subrogation process alone.  Briefly outlined below are some classic examples of how the subrogation process works:

• Your employee is in an employer-owned vehicle and is stopped at a stop light when another vehicle hits him from behind.  After we have paid the claim for your auto damage and your employee’s workers’ compensation claim, we get reimbursed by the insurance carrier for the individual responsible for the accident. 

• A commercial delivery truck is making deliveries in your area.  The driver runs off of the road and strikes your guard rail.  We pay your claim for repairs to the guard rail and then seek reimbursement from the insurance carrier of the delivery truck.

• Your employee, a police officer in this instance, has pulled a vehicle over due to a traffic violation.  As the officer is speaking with the driver, another vehicle veers off of the roadway and strikes the officer.  We process the workers’ compensation claim and once treatment is complete we subrogate our loss against the carrier insuring the vehicle that struck the officer.

Of course, these examples are not as complex as some others.   There are cases involving products liability and cases where negligence or intent may have to be proven.  However, operating under the belief that accidents/incidents do not just happen, but are caused by someone or something, there are many opportunities for us to recover losses incurred from claims.  Remember, too, that while the high dollar claims are certainly important, the small dollar claims add up quickly.  We were delighted when we recovered $43,673 on one workers’ compensation claim, $26,999 on a collision claim and $13,995 on another; however, the claims on which we recovered $1,000, $2,000, $5,000 or more quickly add up.  So, while recovery under the large dollar claims are important, we also work diligently to make recoveries under smaller dollar claims as well.   

Interested in saving more money?  Here’s how you can help:

• Report claims to VML as soon as you are made aware of them;

• Promptly provide VML with information pertaining to the third party (i.e., name, address, telephone number, name of insurance carrier, etc.);

• If a Police Report exists, forward a copy of it to VML along with the claim;

• When an employee is injured, caution that employee about the consequences of accepting a settlement offer from another party without our knowledge and consent;

• If you have any questions contact Pam Pitts, Recovery Specialist at (800) 963-6800.  Remember, we are a team and working together benefits all.