Where one party discharges an obligation that another ought to have borne, two doctrines allocate the loss.

Subrogation substitutes the payer into the rights of the party it paid. Conventional subrogation arises by contract, as in an insurance policy. Equitable subrogation arises without agreement where the payer was not a volunteer, paid to protect its own interest, and the equities favor shifting the loss.

The volunteer rule. A person who pays another’s debt officiously acquires no right of subrogation. Payment made under compulsion, or to protect an interest, is not volunteering.

Insurance context. After paying a claim, the insurer stands in the insured’s shoes against the party responsible. Waivers of subrogation in construction and lease contracts eliminate this, which is why they appear in nearly every such agreement and why carriers must be informed of them.

Contribution allocates a shared obligation among those jointly liable. Traditionally unavailable among intentional wrongdoers, and modified extensively by comparative fault statutes.

Indemnity differs from both: it shifts the entire loss rather than sharing it, based on contract or on a relationship that makes one party’s liability derivative.

Practical point. Settlements should address these rights expressly, since a release that ignores a subrogated carrier resolves nothing.