Under a liability policy, when does an assignment of interest take effect?

An assignment of interest under a liability policy takes effect when the insurer consents. This is because liability insurance contracts are generally personal to the insured, meaning that the insurer has a vested interest in who the policyholder is, including their risk profile. When an insured desires to transfer their rights or interests under the policy to another party, the insurer's consent is required to ensure that they fully understand and accept the implications of that transfer. Such consent protects the insurer from potential risks associated with a new party taking over the policy, as the insurer may not have the same level of information or trust regarding the new party compared to the original insured.

Without the insurer's consent, the assignment could be deemed invalid, which could leave the new party without coverage or the benefits of the policy. This requirement emphasizes the contractual nature of insurance policies and the importance of maintaining a clear and agreed-upon relationship between the insurer and the insured.