After the tragedy in Beirut yesterday, it seems fitting that we talk about the results of the explosion and how an insurance company would and could react to such an incident.
Speculation is that the explosion began in a storage facility for ammonium nitrate. Ammonium nitrate is known to be quite dangerous, and as a result, the company holding it SHOULD have had pollution coverage on their business. This type of policy could be brought into the claim for any type of environmental problems caused by the explosion (including water contamination, respiratory issues from inhalation of toxic chemicals from the explosion, etc.).
However, if the explosion were a result of negligence from the company or mishandling or misuse of ammonium nitrate, the general liability policy should be the policy to respond to the damages caused. In this case, it is going to be paramount that the company has high liability limits as well as an umbrella or excess policy to help with the excess costs. Most general liability policies have a $2,000,000 limit per term with a $1,000,000 limit per occurrence, which is definitely not going to be enough to cover the multitude of damages caused in this case.
An umbrella policy can then step in and cover what the general liability policy could not (up to its own limits, of course).
Something else to consider here is going to be workers’ compensation. If any employees of the company responsible were injured or killed, the worker’s compensation company is going to have to be able to respond to cover medical bills and lost wages for those clients.
It seems horrible to have events like this happen, but that is what insurance agents are here to do (though we prefer being able to prevent these types of disasters through safety recommendations). If your company is insured properly, it will go a long way in mitigating the effects of this type of catastrophe and make everyone’s lives easier afterward.