The company has a $1 million policy, which is an amount that would cover only a fraction of the damage.
It has just been revealed that the fertilizer plant from West, Texas, which exploded in April, holds a liability insurance policy of only $1 million, which would provide coverage for only a tiny fragment of the estimated cost that was generated by the blast.
Lawyers have guessed that the amount of the policy is small enough to be considered nearly negligible.
One of the attorneys, John McCoy, who represents the organization that owns the West Fertilizer Co., provided confirmation of the amount of the liability insurance to the Los Angeles Times, following the initial announcement of the policy on Friday, by the Dallas Morning News. McCoy also pointed out that the plant did not have any other additional, supplemental, or umbrella policies to provide additional coverage.
McCoy pointed out that the liability insurance isn’t an issue yet, as the investigation is ongoing.
He stated in an email that “We do not yet know how this horrific accident occurred,” and added that “We are waiting for federal and state officials to … complete their investigation.”
The explosion occurred on April 17, at which time more than 200 people were injured and 14 people were killed. The blast flattened a number of buildings that were located both near and a number of blocks away. According to Elanor Kitzman, from the office of the state Insurance Commissioner, it is believed that the damage from the explosion could cost up to tens of millions of dollars. Clearly, the liability insurance from the company falls well short of that amount.
This is especially true considering that Kitzman’s statement went on to say that there have been other estimates that have said that the damages could reach $100 million. She, herself, pointed out that this is “far more than the amount of insurance we have heard the company may have had.”
One of the lawyers that have filed a suit against the owners of West Fertilizer, Randy C. Roberts, said that he had received an email directly from the company revealing that the liability insurance coverage that it held was worth only $1 million.