On February 1, 2017, the New Jersey Supreme Court unanimously held that insurers may remain liable for cleaning up pollution even if the original insurance policy has been assigned due to corporate mergers or restructuring of the insured.

In a decision that directly impacts many New Jersey policyholders and insurance companies, the Court confirmed that “no assignment” clauses are intended to prevent policy assignments during the policy period that increase risk to the insurance company.  In the case at hand, the insured loss (environmental contamination) occurred during the policy period and prior to assignment.  Because the policies at issue were assigned after the policies expired and after the loss, only the right to coverage for the already-occurred loss was assigned.  As a result, the Court concluded that the assignment had not increased the risk to the insurer, and the “no assignment” clause did not apply.

Thus, regardless of any anti-assignment clause in an occurrence policy, post-loss assignment of an insurance policy will not alter an insurer’s liability for a cleanup.