Glossary

Subrogation

Subrogation lets a guarantor or insurer who has paid out step into the creditor's position and recover from whoever was really liable — the legal route to getting your money back.

2 min read

Step into creditor's shoesAfter paying

Recover from the liable partyGuarantors + insurers

Definition

Subrogation is the right of a party who has settled a debt or claim — such as a guarantor who paid under a guarantee, or an insurer who paid a claim — to take over the creditor’s rights and pursue the party ultimately responsible.

In plain terms

If you pay a debt that was really someone else’s responsibility, subrogation lets you chase them for it, using the rights of the original creditor.

Why it matters for your company

A guarantor who pays a company’s debt can, by subrogation, pursue the company (or co-guarantors) to recover it. It is central to how personal guarantees and credit insurance work. See joint and several liability.