Right of contribution
The right of contribution is the right of a party who has satisfied a common obligation to reimbursement for the proportionate shares of other obligated parties. Because contribution is an excellent way for an insurance company to recover some of the damages it pays on a particular loss, consideration should be given to separate policies an insured or other entity may maintain on the same risk, property and/or interest. Ohio law gives rise to two rights of contribution for an insurer:
- From a joint tortfeasor, pursuant to Ohio Revised Code Section 2307.25; and
- From a coinsurer or concurrent insurer who provides coverage for the same loss.
The right to contribution from a coinsurer or concurrent insurer is recognized in both statute and equity. Ohio Revised Code Section 3929.26 states that: “[w]hen there are two or more insurance policies upon the same property, each policy shall contribute to the payment of the whole or of the partial loss in proportion to the amount of insurance mentioned in each policy. In no case shall the insurer be required to pay more than the amount mentioned in its policy.”
Because contribution is an excellent way for an insurer to recoup some of the damages that it pays on a particular loss, consideration should be given to separate policies that an insured or other entity may maintain on the same risk, property and/or interest, so that contribution may be pursued from coinsurers or concurrent insurers. To discuss contribution as it applies to one of your files, contact one of our subrogation attorneys.