Subrogation refers to an insurance company seeking reimbursement from the person or entity legally responsible for an accident after the insurer has paid out money on behalf of its insured; assuming the legal rights of the insured.

Typically, subrogation occurs when an insurance company which pays its insured client for injuries and losses then sues the party which the injured person contends caused the damages to him/her.

For example; You hold a commercial lease on a property -- a driver looses control of their vehicle and crashes into the building; The insurance company pays for the damages to the building and then makes a claim to the driver's insurance company for the expenses it paid.