Insurers must cover soybeans lost from warehouse bankruptcy

A New York appeals court said Tuesday that three insurers must cover a commodity trader’s loss of 502,315 bushels of soybeans resulting from a warehouse’s bankruptcy.

The three-judge panel of the Supreme Court of New York’s Appellate Division, First Department, agreed with a trial judge that StoneX Commodity Solutions LLC suffered a covered loss when Express Grain Terminals LLC filed for bankruptcy in September 2021. The case is Endurance American Insurance Co. et al. v. StoneX Commodity Solutions LLC.

The panel said the Kansas City, Missouri-based unit of StoneX Group Inc. presented documents demonstrating EGT housed enough soybeans to cover the commodity trader’s warehouse receipts.

StoneX stored soybeans at EGT’s warehouses from 2017 to 2021 and lost more than 2.7 million bushels when EGT filed for bankruptcy. It was able to recover all but 502,315 bushels through the bankruptcy court and sought coverage from its insurers — Endurance, Zurich North American Insurance Co. and Atain Insurance Co., court records show.

The insurers sued StoneX, seeking a court order stating they were not obligated to cover the lost soybeans, and StoneX filed counterclaims for breach of contract and breach of the duty to indemnify. The trial judge granted StoneX’s motion for partial summary judgment in January 2024, and the insurers appealed.

Representatives for the parties did not respond to requests for comment.