Kieran owns a factory that burns down because Jefferson is negligent.Kieran is fully insured and is limited to indemnification.Which of the following is true?

Question

Quizplus · Accepted Answer

Even though Kieran is fully insured and limited to indemnification, the insurance company may have the right to seek reimbursement from Jefferson for the damages caused by his negligence. This is called subrogation, and it allows the insurer to step into the shoes of the insured and recover the amount paid to them. Therefore, option D is the correct choice. Option A is incorrect because Kieran's indemnification limits his ability to sue Jefferson directly. Option B is incorrect because Kieran's insurance policy will ensure that he is covered. Option C is incorrect because Jefferson's liability is not automatically waived because of Kieran's insurance. Finally, E is incorrect because the question does not provide any information regarding a co-insurance clause.

Kieran Owns a Factory That Burns Down Because Jefferson Is