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6/11/2013 - Texas fertilizer company dangerously underinsured

Business owners need to have ample amounts of liability insurance for their companies.

One of the most crucial concerns entrepreneurs and management executives carry in the course of time in which they own a company is ensuring that they have the proper type and amount of businessowners insurance. In Texas, a fertilizer company has had to learn this the hard way.

First reported by the Dallas Morning News, the fertilizer plant located in West, Texas - which was destroyed by fire after a major explosion, injuring hundreds and causing 15 fatalities - apparently only had $1 million in liability insurance.

The company is being sued by multiple families, alleging that the West Fertilizer Plant carried too much ammonium nitrate on the site, which investigators believe was responsible for the blast.

Randy Roberts, a trial lawyer who is representing several people who lost loved ones on April 15, indicated that the fertilizer company was derelict in its preparation for worst-case scenarios.

"A million dollars is a pathetic amount for this type of dangerous activity," said Roberts.

He added that even routine tasks among business owners, such as trucking companies who transport groceries, need to have a considerable amount of liability coverage and the small amount that the fertilizer company carried is inexcusable.

As a general rule, there are at least four business coverage policies that companies need to have while they're in operation. This includes property insurance, workers compensation insurance, business auto insurance - particularly if companies use vehicles in their practice - and perhaps most important of all liability insurance. It's this last coverage policy that business owners will need if customers file a lawsuit against a company, who may charge that a business was delinquent in its services.

The Insurance Information Institute offers a brief primer on business coverage via a web video, which can be accessed here.

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