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Henkel (Almost) 10 Years Later

By Seth A. Tucker and Charles Fischette
November 16, 2012

Commercial General Liability policies frequently contain an “anti-assignment” clause that prohibits policyholders from assigning any interest under the policy to another person without the insurer's consent. The meaning of this short clause has been hotly disputed since 2003, when the California Supreme Court interpreted the clause in a manner that restricted the transfer of coverage rights in certain corporate transactions. This article examines how other courts have resolved the anti-assignment issue in the last decade.

Background

The ability to assign rights to insurance recovery is especially important in corporate transactions. This is so because the acquiring company may take on historic liabilities of the acquired company, and the associated insurance rights may be a very valuable asset that can help offset those liabilities.

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