Subrogation is the legal right of your insurance company to pursue recovery from a third party who caused or contributed to a loss after your insurer has paid a claim on your behalf. If a material supplier delivers defective shingles that fail and cause water damage, your insurer pays the property damage claim under your CGL policy and then has the right to sue the supplier to recover their payment. The insurer "steps into your shoes" and pursues the responsible party.
For roofing contractors, subrogation most commonly applies in situations involving defective materials supplied by third parties, damage caused by other trades on a construction project, and property damage from events where another party bears responsibility. Your insurer's subrogation rights are important because successful recoveries help keep your claims history cleaner and can reduce future premium increases.
Subrogation intersects with your contractual obligations through waiver of subrogation endorsements. Many construction contracts require you to waive your insurer's subrogation rights against the GC, owner, and other parties on the project. When you agree to a waiver of subrogation, your insurer gives up the right to pursue those parties even if they contributed to the loss. This is why waivers of subrogation must be disclosed to your carrier and added by endorsement before a loss occurs. Failing to obtain the endorsement while contractually waiving subrogation can put you in breach of both your contract and your insurance policy.