West Fertilizer was insured for only $1 million, a fraction of estimated losses

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By DOUG J. SWANSON and REESE DUNKLIN

Staff Writers

Published: 03 May 2013 11:03 PM

Updated: 04 May 2013 09:36 AM




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The West Fertilizer Co., scene of an explosion last month that killed 15 people and injured 200, carried only $1 million in liability insurance.

The cause of the blast is still under investigation. Should the company be found negligent, that amount of coverage probably would pay only a fraction of the claims.

Property damage alone in West could reach $100 million, according to the Insurance Council of Texas, an industry association. The April 17 explosion destroyed an apartment complex and seriously damaged a nursing home and a school. Several hundred homes also sustained damage, with some leveled to the foundation.

An attorney for United States Fire Insurance Co. of Morristown, N.J., confirmed Friday that West Fertilizer had $1 million in liability coverage “with no excess or umbrella coverage.”

Fertilizer facilities like the one in West are not required to have liability insurance that would compensate for damage they might cause, state insurance officials say, even if hazardous material is on hand.




http://www.dallasnews.com/news/west-explosion/headlines/20130503-west-fertilizer-was-insured-for-only-1-million-a-fraction-of-estimated-losses.ece

[aquart]

1. Ain't deregulation cute?

[ZRT2209]

2. thank you lobbyists! heckuva job!

[gopiscrap]

3. fuckers

this is waht happens when we value money over human life...all these fucking plants shoyuld be nationalized!

[TexasTowelie]

4. A complete miss by the insurance underwriter in this case.

Underwriters are supposed to assess risk for the maximum possible loss and advise their clients of the worst case scenario so that the clients are adequately insured. Considering that the fertilizer company was under-insured and that the state would have only limited liability under the Texas Tort Claims Act, the deep pocket in this instance may be to actually file suit against the insurance company itself. It will be interesting to learn in discovery whether the underwriter recognized the risk and made the proper advisories.

If U. S. Fire Insurance company made the proper inspections and cautioned appropriately, then the owners of the fertilizer company should be liable for all of the damages particularly if it was advised that they should have purchased excess or umbrella coverage. If the owner declined that coverage or hid the fact that they were storing so much fertilizer then they should be responsible for all damages. However, if the insurance company did not assess the risk appropriately then I could see where a lawsuit against them could be appropriate.