Media Coverage
Source: Law360
Media Coverage
Press Contacts: Erik Cummins, Matt Hyams, Olivia Thomas
05.20.16
The deadly 2013 explosion that killed 15 people at a West, Texas fertilizer plant was last week determined to be a “criminal act” by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Texas State Fire Marshall’s office.
This finding is considered rare and could provide a defense for chemical companies being sued over the disaster. In addition, it shouldn’t give insurance carriers a reason to deny coverage to those parties.
Insurance lawyers say the “criminal act” ruling by itself isn’t enough to change insurance coverage related to the blast. But another problem to consider is insurers declaring the fire and explosion an instance of domestic terrorism and, as a result, claiming they are not required to pay damages.
Insurance Recovery & Advisory senior associate Tamara Bruno said there’s wide variation in policy language for terrorism exclusions. Sometimes the exclusions are defined narrowly, limited to acts taken with intent to disrupt the economy, interfere with government or intimidate a civilian population. Others define terrorism exclusions very broadly to rope in almost any kind of violence, she said.
"This is big news because it’s such an uncommon situation," Bruno told Law360. "Even the allegation of a company or individual intentionally causing this scale of property damage is rare.”
Read more about the implications of the “criminal act” finding on Law360.