The term political subdivision is fairly all-encompassing and includes every political body responsible for governmental activities in a geographic area smaller than that of the state. A political subdivision is a local government entity created by the state to achieve its obligations. While the general rule for the definition is broad, examples include cities, counties, villages, towns, and districts such as water, park, airport, and school.
Buried in one of the Ohio Revised Code sections dealing with what is commonly referred to as “collateral benefits” is a bar to subrogation claims against political subdivisions.
Subrogation against a political subdivision
To recover damages for injury, death, or loss to person or property caused by an act or omission in connection with a government or proprietary function, Ohio Revised Code 2744.05(B)(1) provides that in an action against a political subdivision: “If a claimant receives or is entitled to receive benefits for injuries or loss allegedly incurred from a policy or policies of insurance or any other source, the benefits shall be disclosed to the court, and the amount of the benefits shall be deducted from any award against a political subdivision recovered by that claimant. No insurer or other person is entitled to bring an action under a subrogation provision in an insurance or other contract against a political subdivision with respect to those benefits.”
Bar to subrogation claims
The same bar to subrogation claims also applies in cases brought against state universities and colleges by virtue of Ohio Revised Code 3345.40(B)(2) which contains nearly identical language.
While a carrier cannot pursue its subrogation rights, the insured’s deductible can be recovered. To discuss political subdivisions and how it may apply to a file you’re currently working, contact one of our subrogation lawyers.