Nutrien prevails before South Carolina Supreme Court on post-loss assignment of insurance policy rights
Clients Nutrien Ltd.
Jones Day won an appeal on behalf of Nutrien Ltd. before the South Carolina Supreme Court, which held that insurance policy rights may be validly assigned after a loss, despite the presence of consent-to-assignment clauses in the policies.
PCS Nitrogen, Inc. (now Nutrien) acquired the assets of Columbia Nitrogen Company (CNC), in 1986. At the time, PCS also acquired an assignment of CNC's insurance policy rights. PCS was later held liable for environmental remediation costs based on CNC's past operations. PCS sought coverage for these liabilities under CNC's policies, but the insurers argued that consent-to-assignment clauses in the policies barred coverage. The South Carolina circuit court and court of appeals agreed with the insurers, holding that PCS could not access the policy rights. The South Carolina Supreme Court reversed the decisions below and held that Old CNC executed a valid post-loss assignment of insurance rights in 1986 and that PCS could not be denied coverage on the basis that the insurers did not consent to the assignment. The Court held that "loss" in this context is synonymous with an "occurrence," and that, "[a]fter an occurrence, the insured possesses a contingent right to coverage … that may be assigned without insurer consent." This holding establishes an important precedent for South Carolina policyholders and brings South Carolina in line with the majority of jurisdictions that have addressed this issue.
PCS Nitrogen Inc. v. Continental Casualty Co. et al., No. 2020-000445 (S.C.)