Which provision prevents the assignment of policy benefits to a third party that is holding the insured property for a fee?

The provision that prevents the assignment of policy benefits to a third party, such as a bailee who is holding the insured property for a fee, is known as "No Benefit to the Bailee." This concept is based on the principle that insurance contracts are designed to cover losses suffered by the policyholder rather than benefiting third parties who may temporarily possess the insured property. In essence, this provision ensures that a bailee cannot claim the benefits of the insurance policy for losses incurred while holding the property, as they are not the insured party and have their own liabilities for the safe keeping of the property.

This is important because it protects the policyholder's interests, ensuring that any compensation resulting from a loss goes directly to them rather than to a third party who may not have contributed to the insurance premium or who may lack the same interest in maintaining the property in good condition. This clause ultimately reinforces the contractual nature of the relationship between the insurer and the insured, emphasizing that the coverage is specifically linked to the policyholder and not extendable to other parties in situations where they have a custody or care-taking role for a fee.