According to court documents, subsidiaries of W.R. Berkley Corp. have filed a subrogation suit against the owner of the West, Texas fertilizer plant that exploded and destroyed much of the community.
Insurers involved in one of two lawsuits filed against Adair Grain Inc., the parent of West Fertilizer Co., are Acadia Insurance Company, Continental Western Insurance Company, and Union Standard Insurance Company and Union Standard Lloyds, according to the suit. The companies insure individuals, churches and businesses affected by the massive blast April 17.
A Berkley spokesperson says the company had no comment, but according to the suit filed in McLennon County district court, Acadia insured a bank; Continental Western insured a car dealership; Union Standard Lloyds wrote a TV and appliance business, an auto supply store and a bakery; and Union Standard Insurance covered two churches and an inn.
It should be noted, Union Standard Lloyds has no connection to Lloyd's of London.
The Berkley companies allege negligence in the operation of the facility, a fertilizer retailer. They say shockwaves, debris and flammeable material "caused severe damages" to the policyholders' properties and businesses.
"[Adair's] negligent act and omissions were the proximate cause of the explosion that resulted in damages to the plaintiffs," reads the lawsuit, filed by attorney Paul A. Grinke of McCathern in Dallas.
Grinke represents the NFL's Dallas Cowboys and related entities in a number of matters, He is also counsel for a farming equipment manufacturer in all lawsuits in Texas regarding the outbreak of Listeria food poisoning in 2011.
Authorities say the cause of the April 17 blast at West Fertilizer remains under investigation, but the volatile chemical compound ammonium nitrate was found at the site. Possibly hundreds of tons of ammonium nitrate were stored at the facility in the rural town of about 2,800.
According to the latest tally from the Insurance Council of Texas, the number of homes destroyed has climbed to 140.
A school, a retirement home and an apartment complex were also heavily damaged.
Fifteen people died as a result of the blast and up to 200 people were injured.
The other lawsuit filed against Adair Grain was brought by a woman who lives in the apartment building next to the plant.
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.
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