Texas Fertilizer Plant Has Only $1 Million Insurance To Meet An Estimated $100 Million In Damages

texas_don't mess wih TX240px-West_Explosion_AerialGov. Rick Perry has long proclaimed Texas as a state favorable to business and has limited environmental protections and regulatory rules. Just how favorable is evident in the news that West Fertilizer Co. had only $1 million in insurance after an explosion that killed 15 people and injured 200 — and caused an estimated $100 million in damages. The insurance lobby has long opposed mandatory insurance laws and this case may be an example of the public cost of that success.


Texas is not unique in allowing companies to maintain minimal insurance coverage. The question is now who will pay for the damage if the company is insolvent. The state and county has already paid millions in recovery costs and are unlikely to accept responsibility. United States Fire Insurance Co. says that it will only extend $1 million for the damage under its policy.

The company maintained this ridiculously low level of insurance despite the fact that it housed extremely dangerous chemicals on its property. West Fertilizer reportedly had 270 tons of ammonium nitrate on site as of the end of last year. Texas Insurance Commissioner Eleanor Kitzman issued a statement insisting that her role is to “assess and quantify risk; we regulate the insurers that help consumers and businesses insure their risk.” Apparently they do not regulate well in the case of a company with a huge amount of potentially explosive material.

Lawyers note that if you want to drive a truck on the interstate, you need $750,000 in coverage, but this plant was allowed to maintain just $250,000 more.

The article below notes that a local resident insured her 5-acre property for $1 million because it had a stock tank on it.

In this case, Texas was great for business, just lousy for citizens.

Source: Dallas News

44 thoughts on “Texas Fertilizer Plant Has Only $1 Million Insurance To Meet An Estimated $100 Million In Damages”

  1. Its like you read my mind! You seem to know so much about this, like you wrote the
    book in it or something. I think that you could do with a few pics to drive the message home a
    bit, but other than that, this is wonderful blog.
    An excellent read. I will certainly be back.

  2. pete,
    Thanks! This guy, and Uncle Charlie, and the other yahoos in the gun fail videos, totally vindicate my expectations.

  3. Mike and Arthur are spot on. Perry wants Texas to secede, here’s the perfect opportunity to show how Texas can do it better..

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