Gov. 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

Yes, allowing businesses to decide just how much coverage they should get is good for business. 

But not getting proper insurance coverage is bad for business, but that’s the businesses mistake. 

This plant will never reopen and be able to operate again. Even if they recovered or had enough funds to rebuild the plant, they’d still be stuck under millions of dollars worth of liability suits as well as millions of dollars of lawyer fees. They’re going to be paying out their own pockets and that’s due to their mistake of not getting proper coverage. 

Besides, just how much insurance do you think this plant was going to buy or how much was the state going to force them to buy? You think they’d have enough insurance to cover $100 million in damages? Do you know what such a policy would cost? Chances are this business wouldn’t even exist if it had to have $100 million in coverage. Unless Rick Perry was some sort of oracle, I think it’s safe to say that no regulator could have foreseen just how much insurance would be needed at this plant. 

But the same principle applies to the residents. If you live near such a plant and we all know how explosive fertilizer can be, why would you not take the proper responsibility and get proper insurance to cover your own personal property? 

One must always take a vigilant stance when it comes to their own property and personal safety. You can’t rely on others to look out for your best interest and you certainly can’t depend on government to provide the proper blanket legislation to cover you and everyone else. 

Take responsibility, be a diligent member of society. If most everyone did that, we wouldn’t have such irresponsible issues in society.