It has been several weeks since the deadly explosion at the West Fertilizer plant in West, Texas that killed 15, injured some 200, and destroyed a sizeable portion of the town, including a retirement center, a middle school and an apartment complex. Since then, my colleague Chad Hemenway has been at the forefront of a story that so far is yielding more questions than answers. The first and most important, of course, is who insured the plant, since at the time of this writing, there appears to have been no liability insurance of any kind at West Fertlizer on what has turned out to be a $100 million property loss. The deaths and injuries of so many people—many of whom were first responders killed as they tried in vain to put out the plant fire that touched off the explosion—will undoubtedly create a significant liability scenario, whether there is coverage or not. And this gives rise to further questions.

If West was able to operate without liability coverage, who on Earth allowed that to happen? Granted, liability coverage is the kind of thing that many will do without unless they are pressed to buy it. After all, there is a reason why auto liability coverage is mandated, and why banks require us to buy homeowners coverage in order to secure a home loan. One would think that the operator of a fertilizer plant, of all things, would think differently. Apparently not. Whatever business acumen the owners had, it surely did not extend to having an appropriate impulse toward procuring appropriate levels of risk financing. They obtained property insurance, PC360 has learned, and there another question arises…was the coverage obtained through an intermediary?

For a risk such as a fertilizer plant, it's certainly not impossible to obtain property coverage directly from the carrier, but honestly, it seems far more likely that it would have been done through a broker of some kind. And if that is the case, then where was the broker when it came to the conversation about liability? One can imagine the conversation between the folks at West and their broker ending in one of three ways. Either the notion of liability cover came up and one or both parties knew full well that none could possibly be obtained for what amounts to an explosives factory within a slingshot's distance of a school and a retirement home. Or, liability cover was there, and the plant simply declined to buy it. Or (and this strikes as the least plausible scenario) the intermediary simply failed to even bring it all up. Occam's Razor suggests that either liability couldn't have been obtained or that the facility declined to buy. If that is the case, then one would imagine that the intermediary would have obtained clear and unquestionable signoff from the client: No, Thank You, We Really Do Not Think We Need Liability Cover In Case We Explode The Entire Town.