PERSONAL INJURY | 2026-10-19

Assigning Insurance Claims After a Loss in California: How Insurance Code § 520 and Fluor Corp. v. Superior Court Override Anti-Assignment Clauses Once the Loss Has Happened

Most liability policies say the insured cannot assign the policy without the insurer’s consent. But California has a statute — Insurance Code section 520 — that bars enforcing those clauses to block the assignment of a claim after the loss has occurred. The Supreme Court’s decision in Fluor Corp. v. Superior Court made this rule decisive, overruling a contrary precedent and reshaping successor-liability and claims-transfer disputes.

Nearly every liability insurance policy contains an anti-assignment clause saying the insured cannot transfer the policy to someone else without the insurer’s consent . Insurers rely on these clauses to control who they are obligated to — they agreed to insure a particular policyholder, not whoever

Insurance policies are contracts, and like many contracts they often restrict the parties’ ability to assign their rights. In liability insurance, the anti-assignment clause reflects a real concern: an insurer underwrites and prices a policy based on the particular risk the named insured presents, and it does not want to be forced to answer to a stranger who acquires the policy. But a different principle takes hold once the insured event — the loss — has already occurred. At that point, what is being transferred is not the ongoing risk, but a claim for a loss that has already happened, and California law treats that transfer very differently. The statute is Insurance Code section 520, and the case that made it decisive is Fluor Corp. v. Superior Court. Together they establish that, in California, an anti-assignment clause cannot block the assignment of a claim after the loss.

Anti-Assignment Clauses and Why Insurers Use Them

An anti-assignment clause is a standard provision stating that the insured may not assign the policy or its benefits without the insurer’s consent. Insurers include these clauses because liability insurance is personal to the insured: the insurer evaluated and priced the risk based on the specific policyholder — its operations, loss history, and risk profile — and an assignment could substitute a different, unassessed risk. Allowing free assignment of an in-force policy could expose the insurer to risks it never agreed to underwrite. For this reason, courts generally enforce anti-assignment clauses as to the transfer of the policy itself before a loss. The crucial question, however, is what happens after a loss has occurred — when the thing being transferred is no longer an open-ended risk but a claim for a loss that has already materialized.

Insurance Code § 520: Post-Loss Assignments Cannot Be Barred

California’s answer is codified in Insurance Code section 520, which provides that an agreement not to transfer the claim of the insured against the insurer after a loss has happened is void. The logic is that once the loss has occurred, the insurer’s exposure is fixed — the event it insured against has already taken place, and the assignment of the resulting claim does not increase or change the risk the insurer agreed to bear. The identity of the party who ultimately collects on the fixed claim does not alter the insurer’s obligation, which was set when the loss happened. Section 520 therefore renders unenforceable any contractual attempt (such as an anti-assignment clause) to prohibit the transfer of a claim after the loss. The statute reflects a long-standing distinction, recognized in insurance law generally, between assigning a policy (transferring ongoing risk) and assigning a claim for a loss that has already occurred (transferring a fixed chose in action).

The Henkel Problem

Despite section 520, the law was muddied for over a decade by Henkel Corp. v. Hartford Accident & Indemnity Co. (2003) 29 Cal.4th 934. Henkel involved a corporate successor that sought coverage under a predecessor’s liability policies for injuries arising from products made before the corporate transaction. The California Supreme Court held that the successor could not claim coverage absent the insurer’s consent, reasoning (in part) that the right to invoke coverage did not pass to the successor merely by the transfer, and the Court’s analysis did not give section 520 the controlling effect many had expected. Henkel became a significant obstacle in corporate successor-liability and coverage disputes, because it suggested that an assignment of insurance rights could be defeated by an anti-assignment clause even where the underlying injuries — the losses — had already occurred. For twelve years, Henkel shaped how courts and parties approached the transfer of coverage rights in California, often to the detriment of successors and assignees.

Fluor Corp. v. Superior Court: Overruling Henkel

The California Supreme Court revisited the issue in Fluor Corp. v. Superior Court (2015) 61 Cal.4th 1175 and overruled Henkel. The Court’s decision turned substantially on Insurance Code section 520, the significance of which had not been fully addressed in Henkel. The Court held that, under section 520, after a loss has occurred an insurer cannot refuse to honor the assignment of a claim based on an anti-assignment clause — the statute voids any agreement barring such a post-loss transfer. Applying this to the successor-liability context, the Court concluded that where the loss or injury giving rise to the claim had already occurred, the insured’s right to invoke the coverage could be assigned notwithstanding the anti-assignment clause and without the insurer’s consent. Fluor thus restored section 520 to its central role and resolved the uncertainty Henkel had created, confirming that California law permits the post-loss assignment of insurance claims.

The Key Distinction: Transfer of Risk vs. Transfer of a Fixed Claim

Fluor and section 520 rest on a distinction that runs throughout insurance law: the difference between assigning the policy (and with it, ongoing risk) and assigning a claim for a loss that has already happened. Before a loss, an assignment could change the risk the insurer bears — substituting a different insured — so anti-assignment clauses are generally enforceable as to the policy itself. After a loss, the insurer’s exposure is already fixed by the event that occurred; assigning the resulting claim merely changes who collects on an obligation whose size and existence were determined by the loss, not by the assignee’s identity. Because the post-loss assignment does not alter the insurer’s risk, section 520 voids any clause purporting to prohibit it. This risk-versus-fixed-claim distinction is the conceptual heart of the rule and explains why California treats pre-loss and post-loss assignments so differently.

What “After a Loss Has Happened” Means

A pivotal question under section 520 and Fluor is when the loss “happened,” because the statute protects assignments made after the loss. In the liability context, this generally focuses on when the injury or damage giving rise to the claim occurred — not when a lawsuit was filed, when liability was finally determined, or when the claim was reduced to a judgment. Fluor’s reasoning tied the protection to the occurrence of the loss or injury underlying the claim. This timing can be significant and contested, especially for long-tail liabilities such as those arising from products or exposures that caused injury over many years: identifying when the loss occurred can determine whether a particular assignment is a protected post-loss transfer. For parties structuring or litigating an assignment, pinpointing when the loss happened relative to the assignment is a central analytical step.

Why This Matters in Corporate Transactions and Successor Liability

The practical stakes of Fluor are greatest in corporate transactions and successor-liability disputes. When a company is sold, merged, or reorganized, the successor often inherits liabilities arising from the predecessor’s past conduct — for example, product or exposure claims based on products made or operations conducted before the transaction. Those liabilities may be covered by the predecessor’s historical liability policies, and the successor’s ability to access that coverage can be essential to managing the inherited risk. Henkel had cast doubt on whether the right to that coverage could be transferred over an anti-assignment clause; Fluor, applying section 520, confirmed that where the underlying losses had already occurred, the claim to coverage could be assigned to the successor despite the clause. This gives successors a firmer footing to invoke historical coverage for pre-transaction losses, and it affects how parties allocate and value insurance assets in deals.

Implications for Policyholders and Claimants

Beyond the corporate-successor setting, Fluor and section 520 matter to a range of parties. A policyholder who has suffered a covered loss can generally assign the resulting claim — for example, as part of settling an underlying dispute — without the anti-assignment clause defeating the transfer, because the loss has already occurred. In third-party liability disputes, this connects to the broader practice (recognized in California bad-faith law) by which an insured facing an excess judgment may assign its claims against its own insurer to the claimant, often in exchange for a covenant not to execute; section 520’s protection of post-loss assignments supports the enforceability of such transfers of the insured’s claim against the insurer once the loss has occurred. For claimants and policyholders alike, the rule provides a reliable mechanism to transfer a fixed insurance claim after a loss, which can be central to resolving disputes and securing recovery.

What the Rule Does Not Do

It is important to be precise about the rule’s limits. Section 520 and Fluor address the assignment of a claim after a loss; they do not make all anti-assignment clauses unenforceable, and they do not authorize the free pre-loss assignment of a policy to substitute a new insured onto an ongoing risk. Nor do they expand the scope of coverage itself: an assignee generally takes the claim subject to the policy’s terms, conditions, and defenses — the assignment transfers the claim as it exists, it does not create new coverage or strip the insurer of defenses it would have had against the original insured. Questions about whether the loss is actually covered, whether conditions were met, and what defenses apply remain to be litigated on their own terms. The rule governs the transferability of a post-loss claim, not the merits of the underlying coverage, and both must be analyzed in any real dispute.

How to Approach a Post-Loss Assignment

For parties contemplating or challenging an assignment of insurance rights in California, the analysis follows several steps. First, determine when the loss occurred relative to the assignment, because section 520 protects transfers made after the loss has happened. Second, confirm what is being assigned — a claim for an already-occurred loss (protected) versus the policy and ongoing risk (where anti-assignment clauses may still apply). Third, analyze the underlying coverage on its own terms, since the assignee takes the claim subject to the policy’s conditions and defenses. And fourth, in the corporate context, consider how Fluor affects the allocation and valuation of historical insurance assets for pre-transaction liabilities. Because these questions — especially the timing of the loss and the scope of coverage — are fact-intensive and can be heavily contested, experienced coverage counsel should be involved in structuring an assignment or litigating its effect. Doing the analysis correctly can determine whether a valuable insurance claim is successfully transferred and recovered.

Section 520 in the Broader Landscape of Assignment Law

Fluor did not arise in a vacuum; it situated California within a national debate about post-loss assignment that most jurisdictions have resolved the same way. The great majority of states enforce what commentators call the "post-loss exception" to anti-assignment clauses, recognizing — as Insurance Code § 520 codifies — that once the insured event has occurred, the policy's concern with controlling the identity of the risk no longer applies. What made California distinctive was not the principle but the twelve-year detour through Henkel Corp. v. Hartford Accident & Indemnity Co. (2003) 29 Cal.4th 934, which had left the state out of step with that consensus until Fluor Corp. v. Superior Court (2015) 61 Cal.4th 1175 corrected course. Practitioners should also be aware that § 520 operates alongside, not in place of, general assignment principles under the Civil Code: an assignment must still be valid in its own right (supported by the requisite intent and, where applicable, consideration), must be documented clearly, and must identify with precision the claim being transferred. In long-tail exposure and environmental cases, parties frequently assign coverage rights across multiple historical policies and multiple insurers at once, which makes careful drafting essential — the assignment instrument should specify the policies, periods, and claims covered so that each insurer's obligation is unambiguous. Because the stakes in these transfers can reach into the tens of millions of dollars for decades-old liabilities, and because insurers continue to litigate the timing of the loss and the scope of what was assigned, a post-loss assignment in California rewards the same rigor a sophisticated coverage dispute demands: precise documentation, a clear factual record of when the loss occurred, and a coverage analysis that anticipates the insurer's defenses.

Related Guides

Frequently Asked Questions

What is an anti-assignment clause?

It is a standard policy provision stating the insured cannot assign the policy or its benefits without the insurer’s consent. Insurers use it because liability insurance is personal to the insured — they priced the risk based on the specific policyholder — and they do not want to be forced to answer to a different, unassessed risk.

What does Insurance Code § 520 say?

Section 520 provides that an agreement not to transfer the insured’s claim against the insurer after a loss has happened is void. Once the loss has occurred, the insurer’s exposure is fixed, so assigning the resulting claim does not change the risk — and any clause purporting to bar that post-loss transfer is unenforceable.

What did Fluor Corp. v. Superior Court decide?

In Fluor Corp. v. Superior Court (2015) 61 Cal.4th 1175, the California Supreme Court overruled Henkel and held that, under Insurance Code § 520, an insurer cannot refuse to honor the assignment of a claim after a loss based on an anti-assignment clause. Where the loss or injury underlying the claim had already occurred, the right to invoke coverage could be assigned without the insurer’s consent.

What was the problem with Henkel?

Henkel Corp. v. Hartford Accident & Indemnity Co. (2003) 29 Cal.4th 934 suggested a corporate successor could not claim coverage under a predecessor’s policies absent the insurer’s consent, without giving § 520 controlling effect. For twelve years it obstructed successor-liability and coverage disputes — until Fluor overruled it and restored § 520.

Why does the timing of the loss matter?

Because § 520 protects assignments made after the loss has happened. In liability cases this generally focuses on when the injury or damage occurred — not when suit was filed or judgment entered. For long-tail liabilities spanning years, pinpointing when the loss occurred relative to the assignment can determine whether the transfer is protected.

Why does this matter in corporate transactions?

When a company is sold or reorganized, the successor often inherits liabilities from the predecessor’s past conduct, which may be covered by historical policies. Fluor confirms that where those losses already occurred, the claim to coverage can be assigned to the successor despite an anti-assignment clause — giving successors firmer footing to access historical coverage and affecting how insurance assets are valued in deals. Call Trembach Law Firm at (213) 645-2246.

Does an assignment expand my coverage?

No. The assignee takes the claim subject to the policy’s terms, conditions, and defenses. Section 520 and Fluor govern the transferability of a post-loss claim, not the merits of the underlying coverage. Whether the loss is covered, whether conditions were met, and what defenses apply remain to be litigated on their own terms.

Can an injured claimant receive an assigned claim against the insurer?

Often yes. In third-party disputes, an insured facing an excess judgment may assign its claims against its own insurer to the claimant, typically in exchange for a covenant not to execute; § 520’s protection of post-loss assignments supports enforcing such transfers once the loss has occurred. Call Trembach Law Firm at (213) 645-2246.

Talk to a California Insurance Coverage Lawyer

California’s Insurance Code section 520 and the Supreme Court’s decision in Fluor Corp. v. Superior Court make clear that an anti-assignment clause cannot block the assignment of a claim after a loss has occurred — a rule that reshaped successor-liability and claims-transfer disputes. Trembach Law Firm, led by Anatolii Trembach (LL.M.; admitted in California), advises policyholders, successors, and claimants on anti-assignment clauses, post-loss assignments, and access to historical coverage. Call (213) 645-2246 for a consultation.

Contact Trembach Law Firm at (818) 514-7680 for a confidential consultation.

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