Relying on the majority rule, UP supported the argument that a corporate policyholder is entitled to a defense and indemnity for pre-acquisition liabilities because liability insurance coverage follows the alleged liability by operation of law. The majority of courts have held that anti-assignment clauses do not apply to the transfer of coverage rights or choses in action after a loss has taken place. This position also is consistent with the custom and practice of insurance companies and corporate policyholders alike.
Court Ohio Supreme Court
Case Number 2005-0378
- Liability insurance follows liability by operation of law