Gray•Duffy negotiates settlement for the recovery of 94% of client’s self-insured retention in subrogation case

September 2020


Gray•Duffy negotiated a settlement for the recovery of 94% of the client’s self-insured retention from the plaintiff’s employer in a subrogation case based on an indemnity contract.


In the underlying case, the Defendant initially defended itself under its self-insured retention (SIR) until that was exhausted. After extensive litigation, that case settled. In the contract between the Defendant and the Plaintiff’s employer, there was an indemnity agreement in favor of the Defendant. In a separate lawsuit, the Defendant sued the Plaintiff’s employer to recover its SIR. Later, the excess carrier who paid part of the settlement, also sued the Plaintiff’s employer for recovery of its payment.

The contract called for the Defendant to obtain a waiver of subrogation in its insurance policies. However, while the Defendant did have the waiver in its primary policy, it did not have one for the excess policy. Thus, the Plaintiff’s employer was forced to defend the claim of the excess carrier due to the defendant’s alleged breach of that term of the contract.

After litigating this case to a significant degree, Gray•Duffy ultimately reached a favorable settlement with the Plaintiff’s employer’s insurer to reimburse the defendant for 94% of the client’s SIR. The reduction from the SIR was provided based on the Defendant assuming a small degree of comparative fault for the injury, and also, for the alleged breach of contract causing the Plaintiff’s employer to incur defense costs to defend the claim by the excess carrier.

Please Note: This article is necessarily general in nature and is not a substitute for legal advice with respect to any particular case. Readers should consult with an attorney before taking any action affecting their interests.