Taylor Corp.rents a warehouse where it conducts a small manufacturing operation.As a condition of its lease,it pays a fire insurance premium.Taylor needs more room and rents larger quarters.Taylor then subleases its old warehouse to Mack.Taylor also assigns its already-paid insurance policy to Mack.This action is:
A) appropriate,so long as Taylor and Mack agree to it.
B) appropriate,so long as the landlord agrees to it.
C) not binding on the insurer.
D) totally within the rights of Taylor,who already paid the premium.

Question

Quizplus · Accepted Answer

Assigning an insurance policy to another party without the insurer's consent is generally not binding on the insurer. Insurance policies often include clauses that restrict the policyholder's ability to transfer the policy without the insurer's approval, primarily because the risk profile of the new insured might be significantly different from that of the original policyholder.