Tapping Corporate Predecessors’ Liability Insurance Policies Just Became Easier Following Fluor Ruling, Westlaw Journal Insurance Coverage, volume 26, issue 2
October 15, 2015

In a landmark decision, the California Supreme Court on August 20, 2015, held that enforcing an anti-assignment clause in an insurance policy as a bar to coverage – where the

In a landmark decision, the California Supreme Court on August 20, 2015, held that enforcing an anti-assignment clause in an insurance policy as a bar to coverage – where the assignment occurred post-loss – was contrary to California Insurance Code Section 520, which provides that consent-to-assignment clauses are invalid if invoked after a loss has happened.  See Fluor Corp. v. Superior Court (Hartford Accident & Indemnity Co.), Case No. S205889 (Cal. Aug. 20, 2015).  The opinion overruled the California Supreme Court’s prior decision in Henkel Corp. v. Hartford Accident & Indemnity Co., 29 Cal. 4th 934 (2003). Henkel had held that corporate successors were not entitled to recovery under an insurance policy assigned without the insurer’s consent, even if the assignment was post-loss and therefore imposed no additional obligations on the insurer. The California Supreme Court’s overruling of Henkel stands to facilitate corporate transactions by making it easier for companies to rely on insurance policies issued to their corporate predecessors.

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