Givaudan Fragrances Corporation v. Aetna Casualty & Surety Company(076523)

SYLLABUS

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the
interest of brevity, portions of any opinion may not have been summarized.)

Givaudan Fragrances Corporation v. Aetna Casualty & Surety Company
(A-16/17/18/19/20/21/22/23/24/25-15) (076523)

Argued November 9, 2016 -- Decided February 1, 2017

LaVecchia, J., writing for a unanimous Court.

The Court is required to determine whether New Jersey adheres to the rule that an anti-assignment clause in
an insurance policy may not bar the assignment of a post-loss claim even though the claim has not been reduced to a
money judgment, a legal rule that an overwhelming number of jurisdictions around the country have accepted.

Plaintiff Givaudan Fragrances Corporation (Fragrances) faces liability as a result of environmental
contamination from a manufacturing site that a related corporate entity operated in a facility in Clifton, New Jersey.
The crux of this appeal involves Fragrances’s effort to obtain insurance coverage for environmental claims brought
by governmental entities in response to discharges of hazardous substances that occurred during the pertinent policy
periods running through January 1, 1986. Fragrances claims that the defendant insurance companies (defendants)
wrote liability policies for Givaudan Corporation during those relevant years. Fragrances argues that it is entitled
now, either as an affiliate of Givaudan Corporation or by operation of an assignment of rights, to have the insurers
provide it with coverage for that environmental liability.

Defendants claim that they insured Givaudan Corporation as their named insured, not Fragrances, and that
any assignment to Fragrances is invalid because defendants did not consent to the assignment, as was required for a
valid assignment according to the language of the insurance policies. Therefore, collectively, defendants refuse to
honor Fragrances’s right to bring insurance contract claims against them.

Fragrances’s affiliate, Givaudan Roure Flavors Corporation (Flavors), is the corporate successor-in-interest
to Givaudan Corporation, the named insurer under the policies. Both Fragrances and Flavors are owned by a
corporate parent named Givaudan Flavors and Fragrances, Inc. Fragrances filed the instant complaint in February
2009 seeking a declaratory judgment that it was entitled to coverage under the policies. In February 2010, while the
declaratory judgment action was pending, Fragrances notified defendants that Flavors planned to assign its post-loss
rights under the insurance policies to Fragrances. Defendants refused to consent to the assignment. Nevertheless,
Flavors executed the assignment to Fragrances.

Both sides moved for summary judgment. Because Fragrances was not acquired by Givaudan Corporation
during the policy period, the court determined that it could not be an affiliated corporation covered under the
policies. The court also determined that the assignment in this case was an assignment of policies, which cannot be
assigned. The court denied Fragrances’s motion and granted defendants’ cross-motion for summary judgment.

The Appellate Division reversed and remanded. 442 N.J. Super. 28 (App. Div. 2015). The panel explained
that, although the anti-assignment clauses in the occurrence policies at issue would prevent an insured from
transferring a policy without the consent of the insurer, “once a loss occurs, an insured’s claim under a policy may
be assigned without the insurer’s consent.” Id. at 36.

The Court granted defendants’ petition for certification. 223 N.J. 405 (2015).

HELD: The Court adopts the policy that, once an insured loss has occurred, an anti-assignment clause in an occurrence
policy may not provide a basis for an insurer’s declination of coverage based on the insured’s assignment of the right to
invoke policy coverage for that loss. The assignment at issue in this case was a post-loss claim assignment and
therefore the rule voiding application of anti-assignment clauses to such assignments applies.
1. Two New Jersey cases have grappled with whether post-loss insurance contract assignments are valid absent the
consent of the insurer. In Flint Frozen Foods, Inc. v. Firemen’s Insurance Co. of Newark, 12 N.J. Super. 396 (Law
Div. 1951), rev’d on other grounds, 8 N.J. 606 (1952), the Law Division permitted a claim assignment after a loss
had occurred. The trial court noted that the rule prohibiting assignments aims to prevent an insurer from bearing
increased and unpredictable liability as a result of covering a new insured party but that, once the loss has occurred,
the insurer’s liability is fixed and the claim may be transferred like any other debt. The Court reversed the judgment
but employed an analysis that did not contradict the Law Division’s reasoning and conclusion that a post-loss claim
may be assigned. (pp. 16-18)

2. In Elat, Inc. v. Aetna Casualty & Surety Co., 280 N.J. Super. 62 (App. Div. 1995), the Appellate Division
concluded that an anti-assignment condition in an insurance policy cannot restrict a policyholder’s ability to assign a
post-loss claim. The panel explained that “the purpose behind a no-assignment clause . . . is to protect the insurer
from insuring a different risk than intended,” but that “[a]ssignment of the right to collect” under a policy “only
changes the identity of the entity enforcing the insurer’s obligation to insure the same risk. Thus, the purpose behind
the no-assignment clause is not inhibited by allowing claim, as opposed to policy, assignment.” Elat, supra, 280 N.J.
Super. at 67. The Elat panel also identified policy purposes that underlie the right to assign claims. (pp. 18-21)

3. The reasoning of those cases aligns with the majority rule in the United States—that a provision that prohibits the
assignment of an insurance policy, or that requires the insurer’s consent to such an assignment, is void as applied to
an assignment made after a loss covered by the policy has occurred. The principle underlying the rule is a deeply
rooted public policy against allowing restraints on alienation of choses in action. New Jersey similarly recognizes
choses in action as personal property and disfavors any attempt to restrict alienation of that property. (pp. 22-23)

4. The rule also embodies a recognition that once a loss occurs, an assignment of the policyholder’s rights regarding
that loss in no way materially increases the risk to the insurer. This can be complicated when an attempted
assignment transfers rights under a third-party liability policy. The issue of post-loss assignments in the third-party
liability context was squarely addressed in Ocean Accident & Guar. Corp. Ltd. v. Sw. Bell Tel. Co., 100 F.2d 441,
445 (8th Cir.), cert. denied, 306 U.S. 658 (1939), which held that, under the employer’s policy, “the liability, the loss
and the cause of action arise simultaneously with the happening of the accidental injury to the employee.” Id. at
446. The rule in Ocean Accident, voiding restrictions on assignment in liability policies after a third party’s loss or
injury has occurred regardless of when a claim is asserted against the insured, was quickly and nearly universally
adopted by courts around the country. (pp. 24-32)

5. The Court adopts the position first recognized in New Jersey in Flint Frozen Foods and Elat: An anti-assignment
clause is not a barrier to the post-loss assignment of a claim. Post-loss assignments do not further the purpose of the
anti-assignment clause, which is to protect the insurer from increased liability, because the insurer’s risk cannot be
increased by a change in the insured’s identity. (pp. 32-34)

6. In the case at hand, the assignment at issue was a post-loss claim assignment—not a post-loss policy
assignment—and does not alter the insurers’ liability for indemnifying the underlying insured event. The post-loss
assignment of the environmental claims pertaining to the site should not be treated differently from the assignment
of any other chose in action. As such, the consent-to-assignment condition, or anti-assignment provisions, in the
insurers’ policies may not be applied to bar the assignment here. (pp. 34-40)

7. The Court is unpersuaded by the insurers’ arguments that the duty to defend under the policies at issue cannot be
assigned. Where a valid post-loss claim assignment is made as to a given claim, an insurer has a duty to defend the
assignee as the holder of that claim. (pp. 40-41)

8. In light of its analysis, the Court does not reach the affiliate issue. (pp. 41-42)

The judgment of the Appellate Division is AFFIRMED.

CHIEF JUSTICE RABNER and JUSTICES PATTERSON, FERNANDEZ-VINA, SOLOMON, and
TIMPONE join in JUSTICE LaVECCHIA’s opinion. JUSTICE ALBIN did not participate.

2
 SUPREME COURT OF NEW JERSEY
A-16/17/18/19/20/21/22/23/24/25
September Term 2015
076523

GIVAUDAN FRAGRANCES
CORPORATION,

Plaintiff-Respondent,

v.

AETNA CASUALTY & SURETY
COMPANY a/k/a TRAVELERS
CASUALTY AND SURETY COMPANY,
TRAVELERS CASUALTY AND SURETY
COMPANY f/k/a AETNA CASUALTY
& SURETY COMPANY, TRAVELERS
PROPERTY CASUALTY CORP. as
the successor-in-interest to
AETNA CASUALTY & SURETY
COMPANY AND TRAVELERS
CASUALTY AND SURETY COMPANY,
AMERICAN HOME ASSURANCE
COMPANY, THE CENTRAL NATIONAL
INSURANCE OF OMAHA, CENTURY
INDEMNITY COMPANY,
CONTINENTAL CASUALTY COMPANY,
THE CONTINENTAL INSURANCE
COMPANY in its own right and
as successor-in-interest to
BOSTON OLD COLONY INSURANCE
COMPANY, EVEREST REINSURANCE
COMPANY f/k/a PRUDENTIAL
REINSURANCE COMPANY, FEDERAL
INSURANCE COMPANY, HARTFORD
ACCIDENT & INDEMNITY COMPANY,
TIG INSURANCE COMPANY as
successor-in-interest to
INTERNATIONAL INSURANCE
COMPANY, LEXINGTON INSURANCE
COMPANY, MUNICH REINSURANCE
COMPANY f/k/a AMERICAN RE-
INSURANCE COMPANY, NATIONAL
SURETY CORPORATION,

1
NATIONAL UNION FIRE INSURANCE
COMPANY OF PITTSBURGH, and
ALLSTATE INSURANCE COMPANY as
successor-in-interest to
NORTHBROOK EXCESS AND SURPLUS
INSURANCE COMPANY f/k/a
NORTHBROOK INSURANCE COMPANY,

Defendants-Appellants,

and

HOME INSURANCE COMPANY,
MIDLAND INSURANCE COMPANY,
THE NEW JERSEY PROPERTY-
LIABILITY GUARANTY
ASSOCIATION on behalf of
MIDLAND COMPANY in
insolvency, MISSION INSURANCE
COMPANY, THE NEW JERSEY
PROPERTY-LIABILITY GUARANTY
ASSOCIATION on behalf of
MISSION INSURANCE COMPANY in
insolvency, and NEW JERSEY
MANUFACTURERS INSURANCE
COMPANY,

Defendants.

Argued November 9, 2016 – Decided February 1, 2017

On certification to the Superior Court,
Appellate Division, whose opinion is
reported at 442 N.J. Super. 28 (App. Div.
2015).

Patrick F. Hofer, a member of the
Commonwealth of Virginia and District of
Columbia bars, argued the cause for
appellants Continental Insurance Company and
Continental Casualty Company (Kinney
Lisovicz, Reilly & Wolff, attorneys; Mr.
Hofer and Timothy P. Smith, on the briefs).

2
Daren S. McNally argued the cause for
appellant Travelers Casualty and Surety
Company (Clyde & Co. U.S., attorneys;
Mr. McNally, Barbara M. Almeida, and Meghan
C. Goodwin, of counsel and on the briefs).

Tanya M. Mascarich argued the cause for
appellant Allstate Insurance Company
(Windels Marx Lane & Mittendorf, attorneys;
Ms. Mascarich and Stefano V. Calogero, on
the brief).

Stephen V. Gimigliano argued the cause for
appellant Hartford Accident and Indemnity
Company (Graham Curtin, attorneys).

John S. Favate argued the cause for
appellant Everest Reinsurance Company
(Hardin, Kundla, McKeon & Poletto,
attorneys).

Gregory S. Thomas argued the cause for
appellants American Home Assurance Company
and National Union Fire Insurance Company of
Pittsburgh, PA (LeClairRyan, attorneys; Mr.
Thomas, Karol Corbin Walker, and Adam G.
Husik, of counsel and on the briefs).

William E. McGrath, Jr., argued the cause
for appellant Munich Reinsurance Company,
Inc. (Smith Stratton, attorneys).

Seth Goodman Park submitted a letter in lieu
of brief on behalf of appellants ACE
Property & Casualty Insurance Company,
Century Indemnity Company, TIG Insurance
Company, and Federal Insurance Company
(Siegal & Park, attorneys).

Jeffrey N. German submitted a letter in lieu
of brief on behalf of appellant National
Surety Corporation.

Robin L. Cohen argued the cause for
respondent (McKool Smith, attorneys; Ms.
Cohen and Kenneth H. Frenchman, a member of
the New York bar, on the brief).

3
 JUSTICE LaVECCHIA delivered the opinion of the Court.

This appeal requires us to settle whether this state

adheres to the rule that an anti-assignment clause in an

insurance policy may not bar the assignment of a post-loss claim

even though the claim has not been reduced to a money judgment.

An overwhelming number of jurisdictions around the country

accept the legal rule voiding restrictions on post-loss claim

assignments. The principle has been described as venerable and

supportive of sound public policy. The Appellate Division

adhered to that principle when rendering its judgment in this

matter, relying on reasoning from previous trial and appellate

decisions of this state.

We now affirm the Appellate Division’s determination. We

hold that, once an insured loss has occurred, an anti-assignment

clause in an occurrence policy may not provide a basis for an

insurer’s declination of coverage based on the insured’s

assignment of the right to invoke policy coverage for that loss.

I.

Plaintiff Givaudan Fragrances Corporation (Fragrances)

faces liability as a result of environmental contamination from

a manufacturing site that a related corporate entity operated in

a facility in Clifton, New Jersey, in relevant part, from the

1960s through 1990. The crux of this appeal involves

4
Fragrances’s effort to obtain insurance coverage for

environmental claims, initiated due to the actions of the New

Jersey State Department of Environmental Protection (DEP) and,

later, the United States Environmental Protection Agency (EPA),

concerning discharges that occurred during the pertinent policy

periods running through January 1, 1986. Fragrances claims that

the defendant insurance companies1 wrote liability policies for

Givaudan Corporation during the relevant years. Fragrances

argues that it is entitled now, either as an affiliate of

Givaudan Corporation or by operation of an assignment of rights,

to have the insurers provide it with coverage for that

environmental liability.

Defendants are insurance companies that wrote primary,

excess, or umbrella policies of insurance for Givaudan

Corporation. Defendants essentially claim that they insured

Givaudan Corporation as their named insured, not Fragrances.

Defendants assert that any assignment to Fragrances is invalid

because defendants did not consent to the assignment.

Defendants maintain that their consent was required for a valid

assignment according to the language of the insurance policies.

1 The numerous defendants are referred to collectively as
“defendants.” Generally stated, plaintiff’s complaint seeks
coverage for policy periods spanning from the 1960s through
January 1, 1986.

5
They claim that the requirement that defendants consent to the

assignment applies to the primary insurance policies and also

applies, either expressly or derivatively from the underlying

primary policy, in the case of the umbrella or excess policies.

Therefore, collectively, defendants refuse to honor Fragrances’s

right to bring insurance contract claims against them. A

summary of the pertinent mergers and corporate changes follows.

A.

Givaudan Corporation was the named insured under the

policies at issue. Givaudan Corporation and its corporate

predecessors were manufacturers of flavors, fragrances, and

other chemicals. As is relevant in this matter, from the 1960s

through the 1980s, the corporation purchased primary, excess,

and umbrella coverage from the defendant insurers.

Givaudan Roure Corporation was formed in 1991 and became

the successor in interest to Givaudan Corporation. Givaudan

Roure Corporation, like its predecessor Givaudan Corporation,

manufactured and sold fragrances and flavorings.

In 1997, “Givaudan Roure Fragrance Corporation”

incorporated as a wholly owned subsidiary of Givaudan Roure

Corporation. Effective January 1, 1998, Givaudan Roure

Corporation transferred the assets and liabilities of the

fragrances part of its business to Givaudan Roure Fragrance

6
Corporation. That transfer excluded Givaudan Roure

Corporation’s insurance policies.

In 2000, plaintiff Givaudan Fragrances was incorporated;

Givaudan Roure Fragrance was merged into Givaudan Fragrances.

That merger was accomplished in a series of steps, which are not

consequential for purposes of the legal issue at hand.2

The flavors aspect of the business also was restructured at

that time and was merged into “Givaudan Roure Flavors

Corporation” (Flavors). As a result of that merger, Flavors

became the corporate successor-in-interest to the named insured

under the policies.

In sum, Givaudan Fragrances and Givaudan Flavors are now

affiliated companies owned by a corporate parent named Givaudan

Flavors and Fragrances, Inc.

B.

2 As Fragrances explains it, “in May, 2000, Plaintiff Givaudan
Fragrances was incorporated, and the successor to Givaudan Roure
Fragrance merged into Givaudan Fragrances.” A Certificate of
Amendment to the Certificate of Incorporation, filed December
31, 1997, says that the name “Givaudan Roure Fragrance
Corporation” would become “Givaudan Roure Corporation.”
In the trial transcript, the court details more of the
corporate history: “[i]n 1991 Roure Corporation merged into
Givaudan . . . . It ultimately[] became Givaudan Roure . . . --
in name that changed to Givaudan Flavors. Then in 1997 you had
an incorporation of Givaudan Roure Fragrance which took on the
name change to Givaudan Roure. Then in 2000 it merged with
Givaudan Fragrance, and then became Givaudan Fragrance
Corporation.”
7
 Fragrances alleges in this matter that “Defendants sold

Givaudan and/or certain of its corporate predecessors or

affiliates various standard form primary, umbrella and excess

comprehensive general liability insurance policies.” The named

insured on the primary policies was “Givaudan Corporation and

any subsidiary or affiliated companies which have or may now

exist or hereafter be created.” The umbrella policies included

similar language naming Givaudan Corporation and its successors.

Fragrances maintains that it “falls within the policy

definition of an insured under each of these Policies . . .

because [Fragrances] is an affiliate of Givaudan Flavors, the

successor by merger to the named insured, Givaudan Corporation.”

In the alternative, Fragrances asserts that it has the right via

an assignment of rights to claim coverage under the policies.

That right, Fragrances asserts, may not be defeated by a clause,

common to the policies at issue, that makes any assignment

subject to the insurer’s consent (the “anti-assignment clause”).

The language of that clause, as it appears in one representative

policy, provides:

Assignment of interest under this policy shall
not bind the Company until its consent is
endorsed hereon; if, however, the Named
Insured shall be adjudged bankrupt or
insolvent, this policy shall cover the Named
Insured’s legal representative as Named
Insured; provided that notice of cancellation
addressed to the Insured named in the
Declarations and mailed to the address shown

8
 in this policy shall be sufficient notice to
effect cancellation of this policy.

The dispute between Fragrances and defendants began in

earnest when Fragrances was sued on the environmental

contamination claims. In 2006, the DEP sued Fragrances for

removal costs and damages that resulted from the discharge of

hazardous substances at the Clifton site. The DEP sought

“reimbursement of the cleanup and removal costs and damages they

have incurred, and will incur, as a result of discharge of

hazardous substances at the Givaudan site located in the City of

Clifton, Passaic County.”3 In 2009, the DEP and the

Administrator of the New Jersey Spill Compensation Fund also

sued several corporations, including Occidental Chemical

Corporation and Tierra Solutions, Inc., which were a part of the

“Newark Bay Complex.” Tierra Solutions, Inc., filed a third-

3 There had been prior interaction between Givaudan Corporation
and environmental regulators. Groundwater extraction had been
occurring at the site through 1987. After the extraction
ceased, Givaudan Roure entered into an Administrative Consent
Order with the DEP, “pursuant to which Givaudan Roure was
obligated to delineate the nature and extent of ground water
contamination at the Givaudan Site.” The DEP also issued a
“Notice of Civil Administrative Penalty Assessment for the
improper analysis and storage of hazardous wastes at the
Givaudan Property” in 1987.
In 2004, the EPA entered the picture, notifying Givaudan
Fragrances that it may be responsible for environmental damages
(specifically, cleanup of the Lower Passaic River) under Section
107(a) of the Comprehensive Environmental Response,
Compensation, and Liability Act (CERCLA), 42 U.S.C.A. § 9607(a).

9
party contribution claim against Givaudan Fragrances Corporation

for contamination from the Clifton site.

C.

Fragrances notified defendants of the environmental claims,

but, generally stated, all defendants declined to provide

coverage because Fragrances was not the named insured under the

policies. Fragrances filed the instant complaint in February

2009 seeking a declaratory judgment that it was entitled to

coverage under the policies.

In February 2010, while the declaratory judgment action was

pending, Fragrances notified defendants that Flavors intended to

assign its post-loss rights under the insurance policies to

Fragrances. Defendants refused to consent to the assignment.

Nevertheless, Flavors executed the assignment to Fragrances,

which Fragrances maintains transferred its rights with respect

to coverage for claims related to the fragrances operations that

had been transferred pursuant to the 1998 restructuring.4

4 The Assignment of Insurance Rights states, in relevant part:

Givaudan Flavors Corporation (“Assignor”)
hereby sells, transfers, assigns, conveys,
grants, sets over and delivers to Givaudan
Fragrances Corporation (“Assignee”), all
rights to insurance coverage under the
insurance policies described on Schedule A
hereto for all occurrences, accidents, events,
loss, injuries, damages, and liabilities
arising out of the conduct of the business of
Assignor, Assignee or any affiliate or
10
 After the assignment was executed, Fragrances filed a

motion for summary judgment, asserting (1) that Fragrances has

the rights of an insured under the policies because of the post-

loss assignment of the claims or, alternatively, (2) that

Fragrances is entitled to coverage under the policies as a

corporate affiliate of Givaudan Flavors, which is the successor

to the first named insured, Givaudan Corporation.

Defendants cross-moved for summary judgment, arguing that

Flavors’s rights were not assignable without defendants’ consent

because the claim had not been reduced to a judgment, and that

Fragrances does not have policy rights as an affiliate.

The trial court decided the issues contrary to Fragrances’s

positions. First, the trial judge rejected Fragrances’s

argument that claimed policy rights as an affiliated

corporation; the court determined that policies which “cover

affiliated corporations, very clearly . . . can only apply to

corporations acquired during the period of policy coverage.”

Because Fragrances was not acquired by Givaudan Corporation

during the policy period, the court determined that it could not

be an affiliated corporation covered under the policies.

predecessor of Assignor or Assignee prior to
January 1, 1998, and relating to liabilities
and/or assets transferred from Assignor to
Assignee on or about January 1, 1998,
including but not limited to any environmental
liabilities (the “Insurance Rights”).
11
 Second, the court noted that decisional law in New Jersey

recognizes that although a policy cannot be assigned, a

particular claim can be assigned; however, the court found that

principle inapplicable under the circumstances. Citing the

assignment language here, the court determined that “[f]or all

intents and purposes, it is assignment of policies.” The court

denied Fragrances’s motion for summary judgment and granted

defendants’ cross-motion for summary judgment.

On appeal, Fragrances continued to maintain that the

assignment was valid as a post-loss assignment of claims, not an

assignment of a policy. Fragrances argued that the assignment,

executed after the policies had expired, assigned claims under

the policies and represented “no change in the risk” to the

insurers. Fragrances also argued that, as an affiliate, it

should have been covered under policies where Givaudan

Corporation was the named insured.

Defendants countered that the 2010 assignment from Flavors

to Fragrances was a policy assignment because it aimed to grant

all rights under the policies to Fragrances. Defendants stated

that insurance policies are personal contracts specific to the

insured party that may not be assigned without the insurer’s

consent. Citing Flint Frozen Foods, Inc. v. Firemen’s Insurance

Co. of Newark, 8 N.J. 606, 611 (1952), defendants argued that

“an insured cannot assign a policy to a third party, even after

12
a ‘loss.’” And, according to defendants, a post-loss claim

becomes assignable only when there has been a judgment against

the insurer or a settlement between the insured and the insurer.

Defendants argued further that the duty to defend can never be

assigned. Finally, defendants asserted Fragrances is not

qualified to be an insured affiliate of Givaudan Corporation.

The Appellate Division reversed and remanded. Givaudan

Fragrances Corp. v. Aetna Cas. & Sur. Co., 442 N.J. Super. 28

(App. Div. 2015). The panel explained that the policies were

occurrence policies, where “the peril insured is the occurrence

itself.” Id. at 36 (citing Zuckerman v. Nat’l Union Fire Ins.

Co., 100 N.J. 304, 310 (1985)). Although the anti-assignment

clauses in the occurrence policies at issue would prevent an

insured from transferring a policy without the consent of the

insurer, “once a loss occurs, an insured’s claim under a policy

may be assigned without the insurer’s consent.” Ibid. (citing

Flint Frozen Foods v. Firemen’s Ins. Co. of Newark, 12 N.J.

Super. 396, 399-400 (Law Div. 1951), rev’d on other grounds, 8

N.J. 606 (1952)). As explained by the Appellate Division, anti-

assignment clauses aim to prevent the insurer from bearing an

unanticipated risk, but once a loss has occurred there is no

longer any danger that the risk will increase. Id. at 37-38.

In light of its holding on the assignment-of-claim issue, the

13
panel declined to address defendants’ remaining arguments. Id.

at 40.

Defendants filed a petition for certification, which we

granted. 223 N.J. 405 (2015).

II.

Defendants argue that Fragrances has no right to claim

coverage under the insurance policies issued to Givaudan

Corporation because (1) Fragrances was neither the named insured

nor the corporate successor to the named insured, and (2) the

named insured could not validly assign its claim under the

insurance policy to Fragrances.

Defendants assert that Flavors’s assignment was invalid as

it added a second insured to the policy, increasing their

liability. More specifically, they contend that Flavors’s

assignment was a proscribed policy assignment, not an allowable

transfer of a claim under the policy. That is so because the

assignment did not transfer a claim to a post-judgment,

precisely defined amount of liability. Moreover, defendants

contend that the assignment multiplied their risk because

defendants may have to provide a defense and indemnity to both

Flavors and Fragrances5 -- and the latter is a party that

defendants did not agree to cover.

5 Several defendants point to an indemnification agreement
between Fragrances and Flavors, which provides:
14
 Fragrances argues that Flavors validly made a claim

assignment -- not a policy assignment -- to Fragrances.

Fragrances contends that under an occurrence policy, once all

potential losses have occurred, the insurance company’s risk is

fixed and the claim may be assigned just like any other chose in

action.

Here, Fragrances maintains, any loss covered by the

insurance policies that defendants issued necessarily occurred

before the policies expired in 1986. After that time,

defendants’ risk was fixed. Fragrances also points to the fact

that its corporate restructuring occurred years after the

relevant policies expired, and years after any loss could have

occurred. Thus, Fragrances contends that its corporate

[Givaudan Roure Fragrance Corporation] shall
indemnify and hold harmless [Givaudan Roure
Corporation] and its directors, shareholders,
officers, employees, agents, consultants,
representatives, successors and assigns from
and against any and all claims, liabilities,
obligations, losses, deficiencies, damages,
penalties, fines, costs, expenses and
judgments of any kind or nature whatsoever
(including reasonable attorney’s fees)
(“Losses”) against [Givaudan Roure
Corporation] arising, or alleged to arise, in
connection with the Assumed Liabilities. The
parties agree to fully cooperate with each
other in deciding how to handle and defend any
investigation, claim, lawsuit or other
proceeding that is brought against [Givaudan
Roure Corporation] relating to Assumed
Liabilities.
15
reorganization should have no impact on defendants’ potential

liability.

Fragrances further contends that Flavors assigned

defendants’ duty to defend along with its other rights under the

insurance policies. To that end, Fragrances argues that

defendants’ risks -- either under the duty to defend or in

providing coverage -- have not multiplied because defendants

still need to provide coverage only for one client, and only for

a historical loss event attributable to the policy’s original

coverage undertaking. Fragrances stresses that the duty to

cooperate under the insurance policies protects insurance

companies from apprehension about working with a client with

whom the insurers did not initially contract to cover.

III.

We do not write on a blank slate in this area of law.

There is substantial case law around the country on the subject

at hand. Importantly, there are also two New Jersey cases that

have grappled with whether post-loss insurance contract

assignments are valid absent the consent of the insurer. We

begin by crediting the prior decisions of this state that have

addressed the issue we resolve today.

A.

First, in Flint Frozen Foods, Inc. v. Firemen’s Insurance

Co. of Newark, 12 N.J. Super. 396 (Law Div. 1951), rev’d on

16
other grounds, 8 N.J. 606 (1952), the Law Division permitted a

claim assignment after a loss had occurred. As security for a

prior debt, Einhorn’s, Inc. (Einhorn’s) held an interest in

Flint Frozen Food’s (Flint) warehoused groceries. Id. at 399.

Einhorn’s obtained a fire insurance policy on the groceries to

protect its interest. Id. at 397. When the warehoused goods

caught fire, Flint immediately alerted Einhorn’s and, on the

same day as the loss, paid Einhorn’s an amount that satisfied

its prior debt obligation. Id. at 398.

Einhorn’s then assigned to Flint its rights to make a claim

under the insurance policy. Ibid. As the assignee of

Einhorn’s, Flint filed a claim with the defendant insurance

company, Firemen’s. Id. at 399. Firemen’s denied liability to

Flint, and Flint filed suit to obtain coverage. Ibid.

The Law Division held that Einhorn’s assignment was valid

because Einhorn’s had assigned a post-loss claim, not a pre-loss

policy. Id. at 400. The trial court explained that because a

loss had occurred, “[t]he recognized reasons for the prohibition

of assignments without the consent of the insurer had ceased.”

Ibid. (quoting Ocean Accident & Guar. Corp. Ltd. v. Sw. Bell

Tel. Co., 100 F.2d 441, 445 (8th Cir.), cert. denied, 306 U.S.

658, 59 S. Ct. 775, 83 L. Ed. 1056 (1939)). The court noted

that the rule prohibiting assignments aims to prevent an insurer

from bearing increased and unpredictable liability as a result

17
of covering a new insured party. Id. at 400-01. However, once

the loss has occurred, the insurer’s liability is fixed and the

claim may be transferred like any other debt. Ibid. The court

issued a judgment in favor of Flint. Id. at 401.

On direct certification by this Court while the matter was

pending unheard before the Appellate Division, the Court

reversed the judgment but employed an analysis that did not

contradict the Law Division’s reasoning and conclusion that a

post-loss claim may be assigned. The Court determined that

Flint was precluded from recovering from the defendant insurer

because Einhorn’s had no interest to transfer. Flint Frozen

Foods, supra, 8 N.J. at 612. Einhorn’s loan had already been

satisfied by Flint’s payment on its debt owed, and therefore

Einhorn’s no longer had an interest in the damaged groceries to

claim as a loss; as the Court summarized it, Flint’s “claim

could rise no higher than that of its assignor, Einhorn’s, which

suffered no loss.” Ibid.

The second New Jersey case to address the subject at hand

is Elat, Inc. v. Aetna Casualty & Surety Co., 280 N.J. Super. 62

(App. Div. 1995), which relied on Flint Frozen Foods and

likewise concluded that a post-loss insurance policy claim may

be assigned. Elat quotes Flint Frozen Foods and Ocean Accident

for the proposition that once liability is fixed, a post-loss

claim may be assigned “like any other chose in action . . .

18
regardless of the conditions of the policy in question.” Elat,

supra, 280 N.J. Super. at 66 (quoting Flint Frozen Foods, supra,

12 N.J. Super. at 401 (quoting Ocean Accident, supra, 100 F.2d

at 445)). In Elat, the Appellate Division concluded that an

anti-assignment condition in an insurance policy cannot restrict

a policyholder’s ability to assign a post-loss claim. Id. at

68.

Peter Vaida owned ELTM, a tool-manufacturing facility in

High Bridge, New Jersey. Id. at 64. Elat, Inc. (Elat) acquired

the assets of ELTM in 1983 and leased the site until 1985.

Ibid. ELTM dissolved in 1986, and Vaida died in 1987. Ibid.

The ELTM facility and its insurance policies became the property

of Vaida’s estate (the Estate) upon his death. Ibid.

A preliminary environmental-cleanup investigation revealed

that ELTM had disposed of materials in a manner that resulted in

soil and groundwater contamination. Id. at 64-65. That

revelation led Elat to estimate that the cost to appropriately

investigate and remediate the contamination would amount to

between $2.5 and $3 million. Id. at 65.

Elat filed a complaint against ELTM, the Estate, and other

entities seeking damages, contribution, and indemnification

related to the costs of the cleanup. Ibid. The parties entered

into a consent judgment; however, the Estate had a negative

value and could not satisfy its part of the judgment. Ibid.

19
Elat and the Estate entered into an agreement under which the

Estate assigned to Elat its rights against the defendant

insurance companies. Ibid.

When the defendants refused to honor the assignment to

Elat, Elat filed a complaint to enforce its rights against the

insurance companies. Ibid. The trial court granted the

insurers’ motion to dismiss on the basis that anti-assignment

provisions in the insurance contracts prohibited the Estate from

assigning its claims to Elat. Ibid.

On appeal, the Appellate Division reversed. Id. at 68.

Writing for the panel, then-Judge Long concluded that anti-

assignment provisions prevent assignment of a policy but not

assignment of a post-loss claim. Id. at 66. As the panel

explained, “[n]o-assignment [provisions within insurance

policies] do not prevent the assignment after loss [because] . .

. the assignment before loss involves a transfer of a

contractual relationship while the assignment after loss is the

assignment of a right to a money claim.” Id. at 67 (second

alteration in original) (quoting 16 Couch on Insurance § 63.40

(rev. 2d ed. 1983)). The reason for the distinction between a

transfer of a contractual relationship and a transfer of a money

claim is critical:

[The distinction] is related to the purpose
behind a no-assignment clause in a casualty or
liability policy which is to protect the

20
 insurer from insuring a different risk than
intended. Assignment of the right to collect
or to enforce the right to proceed under a
casualty or liability policy does not alter,
in any meaningful way, the obligations the
insurer accepted under the policy. The
assignment only changes the identity of the
entity enforcing the insurer’s obligation to
insure the same risk. Thus, the purpose
behind the no-assignment clause is not
inhibited by allowing claim, as opposed to
policy, assignment.

[Id. at 67.]

The panel also identified policy purposes that underlie the

right of insured parties to assign claims, emphasizing that

claim assignment “facilitates the compensation of injured

parties.” Id. at 67-68.6

The reasoning in Elat and in the trial court opinion in

Flint Frozen Foods aligns with the overwhelming majority of

jurisdictions that have, over the decades, spoken on the issue

presented in the instant matter.

B.

6 The panel noted that claim assignment can serve a “salutary
purpose” when the “insured lacks either sufficient resources or
the will to undertake coverage litigation.” Elat, supra, 280
N.J. Super. at 67 (citation omitted). A claimant seeking
recourse against a judgment-proof debtor, for example, may have
only one avenue left -- the debtor’s potentially valuable claim
against his or her insurer. Ibid. Transferring the claim
against the insurer to a party more willing and able to
prosecute the action prevents insurance companies from avoiding
honoring claims of less affluent or able policy holders. Ibid.
21
 The majority rule in the United States is that a provision

that prohibits the assignment of an insurance policy, or that

requires the insurer’s consent to such an assignment, is void as

applied to an assignment made after a loss covered by the policy

has occurred. Conrad Bros. v. John Deere Ins. Co., 640 N.W.2d

231, 237-38 (Iowa 2001); see also 3 Couch on Insurance § 35:8

(3d ed. 2016) (observing that “the great majority of courts”

adhere to this rule). In Conrad Bros., supra, the Iowa Supreme

Court explained the rationale underlying the majority rule:

[O]nce the loss has triggered the liability
provisions of the insurance policy, an
assignment is no longer regarded as a transfer
of the actual policy. Instead, it is a
transfer of a chose in action under the
policy. At this point, the insurer-insured
relationship is more analogous to that of a
debtor and creditor, with the policy serving
as evidence of the amount of debt owed.
Moreover, if we permitted an insurer to avoid
its contractual obligations by prohibiting all
post-loss assignments, we could be granting
the insurer a windfall.

[640 N.W.2d at 237-38 (emphasis added)
(citations omitted); see also Ocean Accident,
supra, 100 F.2d at 446 (quoting 2 May on
Insurance § 386).]

The majority rule is an exception to the general principle

that parties to a contract may freely limit assignment of their

contractual rights. The principle underlying the rule is a

deeply rooted public policy against allowing restraints on

alienation of choses in action. See Bolz v. State Farm Mut.

22
Auto. Ins. Co., 52 P.3d 898, 904, 908 (Kan. 2002) (adopting

majority rule and rejecting insurer’s position “that the public

policy in favor of freedom of contract is superior to the public

policy in favor of free assignment of choses of action”); Wehr

Constructors, Inc. v. Assurance Co. of Am., 384 S.W.3d 680, 688

(Ky. 2012) (finding majority rule “fully consistent with

[Kentucky’s] prior holdings adverse to contractual provisions

tending to restrain the alienability of choses in action”). New

Jersey similarly recognizes choses in action as personal

property and disfavors any attempt to restrict alienation of

that property. Morris v. Glaser, 106 N.J. Eq. 585, 610 (Ch.

1930) (“[A] chose in action has almost time out of mind been

assignable.”), aff’d, 110 N.J. Eq. 661 (E. & A. 1932); see also

N.J.S.A. 1:1-2 (including choses in action in statutory

definition of “personal property”).

The rule also embodies a recognition that “once a loss

occurs, an assignment of the policyholder’s rights regarding

that loss in no way materially increases the risk to the

insurer.” 17 Williston on Contracts § 49:126 (4th ed. 2016).

While application of the rule voiding restrictions on post-

loss assignments is relatively straightforward in the context of

first-party insurance (e.g., casualty or life insurance), it can

become complicated when an attempted assignment transfers rights

23
under a third-party liability policy where the precise moment a

loss occurred may be disputed.

In Fluor Corp. v. Superior Court, the California Supreme

Court extensively addressed the early history and development of

the law regarding third-party liability policies and identified

the “key principle . . . that a liability insurer’s inchoate

obligation to indemnify the insured arises when personal injury

or property damage results during the term of the policy, even

though the dollar amount of the liability continues to be

unascertained until later established.” 354 P.3d 302, 322 (Cal.

2015). Fluor cited two early authorities to support this “key

principle”: American Casualty Insurance Co.’s Case, 34 A. 778

(Md. 1896), and Ross v. American Employers’ Liability Insurance

Co., 56 N.J. Eq. 41 (Ch. 1897). In Ross, supra, New Jersey’s

Court of Chancery explained the reasons for tying the insured

loss to the moment of third-party injury:

The recovery of the judgment against the
insured by the injured party is not the injury
against which the insurer insures him, but it
is the liability for the consequences of the
accident against which he is insured, and of
which liability the judgment is a mere test or
mode of proof. In fact, the recovery of the
judgment is a mere mode by which the insured
proves to the insurer that the intrinsic
character of the accident was such that he was
liable for the consequences of it. In this
respect the judgment resembles the proof of
loss to be furnished to an ordinary insurer
against fire or shipwreck before action
brought, or proof of death in case of life

24
 insurance. These are usually prerequisites to
liability to action, but do not constitute the
cause of action. And in the case of a judgment
against the party insured under one of these
policies for damages for the result of an
accident, the liability, though legally fixed
at that time, relates back to the accident
itself. In contemplation of law the insured
either was or was not, from the first, liable
for the consequence of the accident; and the
presumption is that the result of an
investigation of the facts was never doubtful
from the first, and always sure to result
according to the actual fact. So that the
recovery of the judgment cannot be held or
treated in the law as a contingency which may
or may not happen, but a mere judicial
ascertainment of the intrinsic character of
the occurrence which determined the liability
of the insured.

[56 N.J. Eq. at 44 (emphasis added).]

The reasoning in Ross echoes the opinion in American

Casualty, supra, decided the previous year, in which the

Maryland Supreme Court held that “the contingent liability of

the insurer to reimburse the insured becomes . . . fixed . . .

the moment an event happens which fastens a responsibility on

the insured.” 34 A. at 784. Notably, the American Casualty

court observed that “[the] contingency as to amount in no manner

derogates from the fact that a liability for some amount has

arisen.” Ibid.

Several decades after Ross and American Casualty, the issue

of post-loss assignments in the third-party liability context

was squarely addressed in Ocean Accident, supra, a case

25
involving assignment of an employer’s liability policy claims

following injury to its employees. 100 F.2d at 442-43. First,

recognizing what by then had become a widespread rule, the Ocean

Accident court held that, “under a liability policy such as the

one under consideration, the liability, the loss and the cause

of action arise simultaneously with the happening of the

accidental injury to the employee.” Id. at 446-47. The court

rejected the insurers’ argument that the consent-to-assignment

clause should be enforced because the assignment was made before

the claim was reduced to judgment:

The principle on which the courts hold that an
assignment of a right under a policy
prohibiting assignment may be made is that
such an assignment is not the assignment of
the policy itself (because the parties have
contracted otherwise), but it is the
assignment of a claim, or debt, or chose in
action. The rule is stated in 2 May on
Insurance, § 386, as follows: “An assignment
after loss is not the assignment of the
policy, but the assignment of a claim or debt
-- a chose in action. *** An assignment after
loss does not violate the clause in the policy
forbidding a transfer even if the clause reads
before or after loss. The reason of the
restriction is, that the company might be
willing to write a risk for one person of known
habits and character and not for another
person of less integrity and prudence, but
after loss this reason no longer exists.”

[Id. at 446.]

The rule in Ocean Accident, voiding restrictions on

assignment in liability policies after a third party’s loss or

26
injury has occurred regardless of when a claim is asserted

against the insured, was quickly and nearly universally adopted

by courts around the country. See, e.g., In re Viking Pump,

Inc., 148 A.3d 633, ___ (Del. 2016) (upholding assignment of

claims related to asbestos exposure and rejecting argument that

claims were not “fixed” or “measurable” at time of assignment

because they had not been asserted against insured); Public

Util. Dist. No. 1 v. Int’l Ins. Co., 881 P.2d 1020, 1027 (Wash.

1994) (enforcing assignments which were made “long after the

activities giving rise to liability”).7

The California Supreme Court’s recent decision in Fluor,

supra, adopting the majority rule on post-loss assignments, is

particularly instructive because it extensively explores the

current legal landscape on anti-assignment clauses and because

it departs from that court’s prior decision in Henkel Corp. v.

7 In Fluor, supra, the California Supreme Court discussed a
number of recent cases applying the rule to post-loss
assignments. See 354 P.3d at 326-27 (identifying Gopher Oil Co.
v. Am. Hardware Mut. Ins. Co., 588 N.W.2d 756, 763–64 (Minn. Ct.
App. 1999); In re ACandS, Inc., 311 B.R. 36, 41 (Bankr. D. Del.
2004); Elliott v. Liberty Mut. Ins. Co., 434 F. Supp. 2d 483,
491 (N.D. Ohio 2006); Egger v. Gulf Ins. Co., 903 A.2d 1219,
1223, 1226-28 (Pa. 2006); Pilkington N. Am., Inc. v. Travelers
Cas. & Sur. Co., 861 N.E.2d 121, 126, 129 (Ohio 2006); In re
Ambassador Ins. Co., 965 A.2d 486, 490-91 (Vt. 2008); Viking
Pump, Inc. v. Century Indem. Co., 2 A.3d 76, 107 (Del. Ch.
2009); Ill. Tool Works, Inc. v. Commerce & Indus. Ins. Co., 962
N.E.2d 1042, 1050, 1055 (Ill. App. Ct. 2011), appeal denied, 968
N.E.2d 81 (Ill. 2012); and Narruhn v. Alea London, Ltd., 745
S.E.2d 90, 94 (S.C. 2013)).
27
Hartford Accident & Indemnity Co., 62 P.3d 69 (Cal. 2003), which

had been one of the few cases to explicitly reject the majority

rule. In both Fluor and Henkel, the plaintiff corporation had

been assigned the rights and liabilities of a predecessor

corporation insured by Hartford Accident & Indemnity Company.

See Fluor, supra, 354 P.3d at 304. The key issue in both cases

was whether claims based on injuries that occurred during the

policy period, but that had not been reduced to money judgments,

were assignable without the insurer’s consent.

In Henkel, supra, the court found in favor of the insurer,

concluding that the anti-assignment clause was enforceable and

that claims under the policy were not assignable until they had

been reduced to a sum certain. 62 P.3d at 76. Although it

acknowledged that courts had allowed the assignment of claims

under an insurance policy, the court in Henkel determined that

such an assignment should be upheld only

(1) when at the time of the assignment the
benefit has been reduced to a claim for money
due or to become due, or (2) when at the time
of the assignment the insurer has breached a
duty to the insured, and the assignment is of
a cause of action to recover damages for that
breach.

[Ibid.]

In Fluor, supra, the court expressly overruled Henkel’s

holding on anti-assignment clauses. 354 P.3d at 334. The Fluor

court reached its decision after considering an obscure

28
California insurance code provision that had not been raised or

addressed in Henkel. Id. at 303. That provision states that

“[a]n agreement not to transfer the claim of the insured against

the insurer after a loss has happened, is void if made before

the loss.” Cal. Ins. Code § 520. Based on a historical review

of applicable insurance law concepts, the court concluded in

Fluor that Section 520 applies to third-party liability

insurance and that a “loss” under the statute refers to “a loss

sustained by a third party that is covered by the insured’s

policy, and for which the insured may be liable.” Fluor, supra,

354 P.3d at 330. Applying the statutory language, the court

held that a liability insurance claim can be assigned without

the insurer’s consent as soon as the event triggering liability

has occurred, regardless of whether there has been a money

judgment or settlement with respect to the claim. Ibid.

While the Fluor court necessarily applied the California

statute in reaching its result, it also thoroughly reviewed the

development of common law principles applicable to liability

insurance and discussed the validity of anti-assignment clauses

in light of those principles. Fluor recognized that Henkel was

not only inconsistent with the California statute but also with

the “overwhelming majority” of precedent in other jurisdictions,

which followed the rule of Ocean Accident. Id. at 326.

29
 Fluor also observed that the Ocean Accident rule has been

incorporated into several leading treatises, and that its

influence has grown to the extent that

[f]or many decades . . . courts, parties to
transactions, and litigants generally assumed
the legal propriety of assigning to a
successor, in connection with a transfer of
assets and liabilities, the right to invoke
insurance coverage for losses that had
previously occurred -- even if those losses
were not determined with precision or indeed
known, let alone reduced to a judgment.

[Ibid.]

Fluor identified only one state that has rejected the

majority rule of Ocean Accident. In Travelers Casualty & Surety

Co. v. United States Filter Corp., the Indiana Supreme Court

declined to uphold a post-loss assignment under a liability

insurance policy, finding that, for such an assignment to be

valid, “the loss must be identifiable with some precision [and]

must be fixed, not speculative.” 895 N.E.2d 1172, 1180 (Ind.

2008). The Indiana Court agreed with Henkel that anti-

assignment clauses should be enforced in the third-party

liability context, though it acknowledged that several

jurisdictions had reached the contrary result. Id. at 1179-80

(declining to follow N. Ins. Co. of N.Y. v. Allied Mut. Ins.

Co., 955 F.2d 1353 (9th Cir.), cert. denied, 505 U.S. 1221, 112

S. Ct. 3033, 120 L. Ed. 2d 903 (1992); Egger v. Gulf Ins. Co.,

903 A.2d 1219 (Pa. 2006); Gopher Oil Co. v. Am. Hardware Mut.

30
Ins. Co., 588 N.W.2d 756 (Minn. Ct. App. 1999)). Fluor noted,

however, that in the years since Traveler’s Casualty was

decided, no out-of-state case has followed its holding that a

“loss must be identifiable with some precision and must be

fixed, not speculative.” Fluor, supra, 354 P.3d at 327 & n.46

(internal quotation marks omitted).

Finally, we also note, as did the Fluor court in its

decision, that there is a minority view that applies an entirely

different approach to claim assignment. In its comprehensive

review, Fluor identified a few cases from minority rule

jurisdictions that, “employing an approach significantly

different from Henkel, enforce consent-to-assignment clauses

even more strictly than in that case, by failing to recognize

any post-loss exception to those clauses (even, apparently, as

to claims that have been reduced to a money judgment).” Id. at

327 n.46 (identifying Del Monte Fresh Produce (Hawaii), Inc. v.

Fireman’s Fund Ins. Co., 183 P.3d 734, 747 (Haw. 2007); Holloway

v. Republic Indem. Co. of Am., 147 P.3d 329 (Or. 2006); In re

Katrina Canal Breaches Litig., 63 So. 3d 955, 959 (La. 2011);

and Keller Founds., Inc. v. Wausau Underwriters Ins. Co., 626

F.3d 871, 874–78 (5th Cir. 2010)). To the extent those cases

stand for the principle that the rights of insurers to enforce

anti-assignment clauses should be valued above the rights of the

insured to freely assign their claims, they are inconsistent

31
with the established policy of New Jersey. See Morris, supra,

106 N.J. Eq. at 610; see also N.J.S.A. 1:1-2.

IV.

A.

With respect to the core argument about the enforceability

of insurance policy anti-assignment provisions concerning post-

loss claims, we do not hesitate to adopt the position first

recognized in this state in Flint Frozen Foods and Elat: An

anti-assignment clause is not a barrier to the post-loss

assignment of a claim. The better rule is the generally

recognized majority rule on that issue.

Simply stated, that general rule recognizes that anti-

assignment clauses in insurance contracts “apply only to

assignments before loss, and do not prevent an assignment after

loss.” 3 Couch on Insurance § 35:8; see also 17 Williston on

Contracts § 49:126 (4th ed. 2015) (“Policy provisions that

require the company’s consent for an assignment of rights are

generally enforceable only before a loss occurs.”); 5 Appleman

Insurance Law & Practice § 3425 (2d ed. 2011) (“An insurer may

not limit an insured’s ability to assign his or her rights under

a policy after the occurrence of an event which gives rise to

the insurer’s liability.”). Such clauses merely prohibit “the

assignment of the policy, as distinguished from a claim arising

under the policy.” 3 Couch on Insurance § 35:8. The

32
distinction is that “the assignment before loss involves a

transfer of a contractual relationship while the assignment

after loss is the transfer of the right to a money claim.”

Ibid. Thus, post-loss assignments do not further the purpose of

the anti-assignment clause, which “is to protect the insurer

from increased liability,” because, after the “events giving

rise to the insurer’s liability have occurred, the insurer’s

risk cannot be increased by a change in the insured’s identity.”

Ibid.; see Wehr Constructors, supra, 384 S.W.3d at 685 (“[T]he

courts that have considered this issue have overwhelmingly

concluded that once an insured occurrence has transpired, the

insured’s claim then ripens into a chose in action, a type of

personal property, which, pursuant to fundamental principles of

debtor-creditor relationships, may not, ordinarily, be

restrained from alienability.”); see also Ross, supra, 56 N.J.

Eq. at 44 (explaining New Jersey’s long-standing rationale for

tying “loss” to moment of injury).

B.

Having adopted the majority rule, we turn now to its

application to the case at hand. In doing so, we consider first

whether Flavors’s assignment to Fragrances was a post-loss claim

assignment, or, as the insurers argue, an attempt to assign the

insurance policies themselves. We conclude that it was a post-

loss claim assignment and therefore that the rule we adopt today

33
voiding application of anti-assignment clauses to such

assignments applies. In addition, we address the insurers’

argument that the assignment was invalid because it unfairly

multiplied the risks they agreed to bear, either by increasing

their ultimate indemnity obligations or their duty to defend.

We begin by noting that the policies at issue are

occurrence policies. They provide coverage based on liability

for an occurrence to which the policy applies. See Zuckerman,

supra, 100 N.J. at 311 (explaining that occurrence policies

historically “insured against damage caused by collision, fire,

war, and other identifiable events”). As such, the relevant

event giving rise to coverage is the loss event, not the entry

of a judgment fixing the amount of damage for that loss. See

Ross, supra, 56 N.J. Eq. at 44 (explaining that insurer’s

liability “relates back” to accident or occurrence insured

against); Ocean Accident, supra, 100 F.2d at 446 (“[U]nder a

liability policy . . . the liability, the loss and the cause of

action arise simultaneously with [the third-party injury].”).

Here, the right to insurance coverage for the “occurrence”

of environmental contamination was assigned to Fragrances after

the policies had expired. The loss event occurred during the

policy periods. The risk of exposure that was contractually

undertaken by the insurer occurred prior to the assignment, and

it occurred due to the actions or inactions of the entity that

34
the insurer insured when that loss event occurred. See, e.g.,

Ill. Tool Works, Inc. v. Commerce & Indus. Ins. Co., 962 N.E.2d

1042, 1054 (Ill. App. Ct. 2011) (“The risks do not change or

increase after the [policy] period expires or if an assignee

rather than the named insured seeks coverage for losses.”),

appeal denied, 968 N.E.2d 81 (Ill. 2012); In re Ambassador Ins.

Co., supra, 965 A.2d 486, 490-91 (Vt. 2008) (noting that

insurer’s risk was unaffected by post-loss assignment).

Accordingly, we hold that this assignment after the insured-

against occurrence took place and after the conclusion of the

policy period is an assignment of a post-loss claim.

Nothing in the form of the assignment from Flavors to

Fragrances alters the conclusion that only post-loss claims were

assigned. The Appellate Division appropriately rejected the

insurers’ argument that focused myopically on the wording of the

assignment without considering that the policy periods had

ended. The insurers argued that the assignment provision’s

language is so broad as to constitute a transfer of the policy.

The panel correctly pointed out that the rights under defendant

insurers’ policies were assigned after the policy periods

expired. Givaudan Fragrances Corp., supra, 442 N.J. Super. at

38. In the circumstances of this matter involving lapsed

policies, the assignment with respect to each is necessarily a

claim assignment. As the panel explained, because the loss-

35
claim rights were assigned after expiration of the policy

periods, “the assignment of the rights to the policies . . .

could not have increased the risk to any defendant insurer

because all losses occurred before the assignment.” Ibid.

We agree. The policy period applicable to each of the

disputed policies had concluded at the time of the assignment

from Flavors to Fragrances and, therefore, no new policy

coverage for not-yet-occurred loss to the assignee was

transferred. The latter would have been a transfer of policy

requiring insurer consent, but that is not this case. Only

rights to coverage for the already-occurred loss event were

assigned in this case.

Defendants argue for an exception to the general rule

allowing post-loss claim assignments because the claim at issue

stems from an environmental contamination. We disagree. The

fact that the environmental claim will require time to sort out

liability and damages resulting therefrom does not alter our

conclusion. Other claims involving losses that have occurred,

but which cannot be determined with precision, do not alter the

conclusion that the assignment must be honored. Anti-assignment

clauses or similar consent-to-assignment provisions have been

held over and over not to erect a barrier to assignment of post-

loss claims that are not reduced to judgment. See, e.g., Gopher

Oil, supra, 588 N.W. 2d at 763-64 (finding no expansion of risk

36
due to assignment of rights involving loss claim in

environmental contamination case); Viking Pump, supra, 148 A.3d

at ___ (holding excess policy insurance rights were validly

assigned post-loss and insurers were responsible for liability

for asbestos occurrences spanning multiple policy periods); Ill.

Tool Works, supra, 962 N.E.2d at 1050 (enforcing post-loss

assignment notwithstanding that extent of damages from injury

resulting in loss may not be known at time of assignment);

Egger, supra, 903 A.2d at 1227-28 (finding excess policy

insurance rights assignable post-loss even when assignment was

made prior to jury verdict because risk was triggered by injury,

not money judgment). In sum, we hold, as did the Appellate

Division, that the post-loss assignment involved herein was not

a post-loss policy assignment.

Finally, we consider whether the insurers’ risks were

multiplied as a result of this post-loss assignment. As to the

insurers’ indemnification obligation, we are unpersuaded that

replacement of Fragrances for Flavors as the insured to which

coverage is now owed resulted in an increase in the contracted-

for risk.

The environmental contamination occurrence -- and resultant

loss -- took place during the relevant policy periods. The

assignment does not alter the insurers’ liability for

indemnifying the underlying insured event. The loss event has

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occurred. It is no more, and no less, as a result of Flavors’s

assignment of its rights under the respective policies to

Fragrances. Fragrances now holds those rights. The insured

loss is one that is fixed. Once transferred, that loss remains

static -- a property right now held by the assignee, Fragrances.

The claim that must be honored by the insurers is defined by the

policy applicable to each insurer for the occurrence that took

place under the terms of each insurance policy while the policy

was in effect.

Although several defendants assert that a separate

indemnification agreement between Fragrances and Flavors causes

an expansion of their policy indemnification obligation, we

reject that argument. The insurers’ obligations under their

policies have been assigned to Fragrances. Only Fragrances

holds those rights. The insurance policy obligation is not

expanded by any separate contractual agreement between

Fragrances and Flavors. The claim that the insurers must honor

under the assignment of rights is not defined on the basis of

the separate indemnification agreement between Flavors and

Fragrances. There is no doubling of risk as the insurers argue

as a result of any indemnification agreement between Flavors and

Fragrances.

In sum, we are unpersuaded that this assignment increases

the risk undertaken by the insurers for the policy periods for

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which they wrote coverage, in specified amounts, for occurrence-

based claims pertaining to the Givaudan site in Clifton. Thus,

the post-loss assignment of the environmental claims pertaining

to the site should not be treated differently from the

assignment of any other chose in action. As such, we hold that

the consent-to-assignment condition, or anti-assignment

provisions, in the insurers’ respective policies may not be

applied to bar the post-loss claim assignment here.

We are also unpersuaded by the insurers’ arguments that the

duty to defend under the policies at issue cannot be assigned

and that, in attempting to assign the duty to defend, Flavors

impermissibly multiplied the risk faced by the insurers.

It is true that the duty to defend is governed by “separate

principles” from the duty to indemnify the insured: when a

complaint is filed against an insured that might be covered by

the policy language, evaluating the duty to defend requires “a

comparison between the allegations set forth in the [complaint]

and the language of the insurance policy.” Flomerfelt v.

Cardiello, 202 N.J. 432, 444 (2010). The duty to defend is

specific to each claim made against the insured “irrespective of

the claim’s actual merit.” Voorhees v. Preferred Mut. Ins. Co.,

128 N.J. 165, 173 (1992). The assignment of claims to

Fragrances, therefore, necessarily included assignment of the

insurers’ duty to defend those claims.

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 The assignment of claims did not result in an increased

burden on the insurers, however, because in assigning the claims

at issue to Fragrances, Flavors itself chose to forego its right

to invoke the duty to defend. Flavors did not purport to retain

its interest as an insured with respect to the assigned claims,

and there is no need to address the specter raised by the

insurers that they might be faced with competing claims to a

defense from both corporations. Cf. Fluor, supra, 354 P.3d at

310 n.12 (addressing “ubiquitous potential for disputes over the

existence and scope of [an] assignment” and potential for

resultant “dual burden” on insurers (quoting Henkel, supra, 62

P.3d at 75)). Where a valid post-loss claim assignment is made

as to a given claim, an insurer has a duty to defend the

assignee as the holder of that claim. See Ill. Tool Works,

supra, 962 N.E.2d at 1055-56 (finding “no merit” in insurers’

argument that assignee of liability insurance claim may not

assert duty to defend); N. Ins. Co., supra, 955 F.2d at 1358

(rejecting argument that “[s]ubstituting a different defendant

may alter substantially defense costs”).

In conclusion, we add only that, in light of the above

analysis, we need not resolve the argument that Fragrances is a

covered affiliate of Givaudan Corporation under the insurance

policies at issue. To the extent that those defendants that

provided excess or umbrella policies to Givaudan Corporation

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claim that the affiliate language in their policies is different

from that used by the primary insurers, we need not address

those differences, since we do not reach the affiliate issue.

V.

The judgment of the Appellate Division is affirmed.

CHIEF JUSTICE RABNER and JUSTICES PATTERSON, FERNANDEZ-VINA,
SOLOMON, and TIMPONE join in JUSTICE LaVECCHIA’s opinion. JUSTICE
ALBIN did not participate.

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