California Code, Insurance Code - INS § 11656

Such policy shall also provide that the employee has a first lien upon any amount which becomes owing to the employer from the insurer on account of the policy, and that in case of the legal incapacity or inability of the employer to receive the money and pay it to the claimant, the insurer will pay it directly to the claimant.  To the extent of such payment, the obligations of the employer to the claimant are thereby discharged.