West Fertilizer Plant Explosion to Cause $100M in Insured Property Losses

The massive explosion at a West, Texas fertilizer plant has caused at least $100 million in insured losses to property.

Mark Hanna, spokesman of the Insurance Council of Texas, tells PC360 from the small rural town of about 2,800 that damages include “concussion-type losses.”

That is, some homes look normal from the outside but have suffered damage.

To illustrate the point, Hanna relays a conversation he had with a resident: “She had a can of beans on the kitchen counter and it exploded, but no windows of her house were broken.”

In other words, damages may take some time to assess because they may not immediately be noticed. The forces related to the explosion may have affected structures and vehicles differently than a tornado, for example, although the destruction has been described as tornado-like.

The blast April 17 destroyed 75 homes, a middle school, an apartment building, and a retirement center. Insurance adjusters are on the scene assisting policyholders.

Hanna tells another story of a man and his 9-year-old son driving between the apartment building and the retirement center. The truck drove 20 yards on two wheels when the blast occurred. Both were not seriously hurt but the truck was crumpled on one side and is totaled.

“We’re hearing a lot of strange stories related to the force of this blast,” says Hanna. “It’s like visiting the site of a tornado and hearing about straw going through wood. It’s hard to believe.”

Hanna says the town is split in three sections. Residents of zone 1, the farthest away from the explosion, have been allowed back to their homes. Zone 2 was just opened. The most affected areas remain closed off.

Hanna reports the Red Cross says it is assisting about 180 families, including those from the apartment complex. Many do not have insurance.

Plaintiffs’ attorneys are also in town, says Hanna.

Authorities at a news conference today say the cause of the blast remains under investigation. Possibly hundreds of tons of ammonium nitrate was stored at the facility, a fertilizer retailer.

See also: Who the Heck Insured This Place?

It is not clear who insured the West Fertilizer Co. but PC360 has learned only a handful of carriers serving the agribusiness niche would take the risk. Independent agents handling the business would ask if ammonium nitrate was stored on the premise. This would not preclude the facility from obtaining insurance but it would trigger additional investigation by a carrier.

PC360 has also learned many facilities like this one have stopped storing ammonium nitrate to avoid additional regulation. Facilities that do store the volatile chemical compound must register with the Department of Homeland Security. Reportedly, this plant did not.


Resource Center

View All »

Increase Sales Conversion with this Complimentary White Paper

This whitepaper will share proven techniques - used by many of the industry's top producers...

D&O Policy Definitions: Don't Overlook These Critical Terms

Unlike other forms of insurance where standard policy language prevails, with D&O policies, even seemingly...

Environmental Risk: Lessons Learned from Willy Wonka and the Chocolate...

Whether it’s a chocolate factory or an industrial wastewater treatment facility, cleanup and impacts to...

More Data, Earlier: The Value of Incorporating Data and Analytics...

Incorporating more data earlier in claims lifecycles can help you reduce severity payments by 25%*...

How Many Of Your Clients Are At Risk Of Flood?

Every home is vulnerable to flooding. Learn four compelling reasons why discussing flood insurance with...

Gauging your Business Intelligence Analytics Capabilities and the Impact of...

Big Data, Data Lakes and Data Swamps, How to gauge your company's Big Data readiness....

Extending Contact Center Capabilities Across the Insurance Enterprise

Today advancements in technology are making a big impact on business and society. To yield...

Drug and Alcohol Testing Requirements

In this two-part series, NBIS Risk Management team will break down the requirements to assist...

Why Cyber Liability is Essential for Human Service Organizations

For traditional low-tech operations, information is often compromised in ways that don't involve technology. Access...

A Solution for Large Commercial Habitational Accounts

6 Reasons to place your LARGE Habitational Accounts with Dauntless.

Looking for Markets?

Search Kirschner’s Insurance Directory to help service your hard to place risks.

497 Risk Categories | 70,000 P&C Insurance Markets

Specialty Markets Insight eNewsletter

Receive updates and analyses on hard to place and challenging coverages. Sign Up Now!

Advertisement. Closing in 15 seconds.