Subrogation professionals learn early on there are many impediments to a successful subrogation outcome. Perhaps one of the ultimate frustrations is spoliated evidence! When receiving a new property loss for subrogation the first instinct of the seasoned Recovery Specialist is to quickly call the insured to determine the whereabouts of the "faulty" product so that it can be preserved as evidence and made available for inspection by an expert. All too often the item has been destroyed or thrown out.
Probably one of the worst cases recently encountered involved a Property case where the insured's pool exploded releasing 10,000 gallons of water into the policyholder's finished basement! Contact with the insured revealed that the pool most likely had been improperly installed the year prior to the loss. While these facts would indicate probable subrogation recovery against the manufacturer or installer, there were unfortunate intervening causes preventing subrogation. Upon realizing that the liner was ripped and water beginning to flow into the finished basement, the insured and several family members took various actions including ripping holes in the liner and even using a hammer to bang a hole in the opposite end of the pool. Needless to say, the evidence was so mutilated that it became impossible to determine if the failure was due to a manufacturer's defect or installation error. These unfortunate events and actions by the insured to mitigate a loss destroyed any possibility of recovering the $31,000 paid.
The best way to avoid spoliation is early intervention. Reach out to the insured party early in the claims process, keeping recovery potential in mind. Unfortunately in this scenario we would have needed to intervene while the loss was occurring!