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Middletown Plant Damaged In Blast Insured For $877 Million
The Middletown power plant that exploded Sunday was insured for damages totaling as much as $877 million to the facility alone, according to documents filed with the state.
Damages from the explosion might be much less than that, though an estimate was not available Tuesday.
Documents show an $877 million "all risk" property policy covering the plant. That is easily the biggest portion of potential insured losses from the explosion.
The plant is insured by a group of property-casualty companies, none of which is based in Connecticut. The policy was underwritten by Starr Tech, The ACE Group, Lloyd's of London, Chartis (the property-casualty division of American International Group), National Union Insurance Group and Arch Insurance Group.
The Hartford Financial Services Group insured some equipment for one of the contractors, and nothing else. The Travelers Cos. will not say if it insured any part of the project. But Businessinsurance.com, citing an anonymous source, reported Monday that Travelers has 5 percent of the loss.
Considering the insurance coverage and the potential loss, this is not a major calamity in the insurance industry.
"Large-scale industrial accidents are not as rare as people might believe," said Robert Hartwig, an economist and president of the Insurance Information Institute.
Five to eight industrial accidents happen in any given year in the U.S. involving energy facilities, factories, major construction projects, mining or some other operation of that size. It's not rare for costs to be in the hundreds of millions of dollars, Hartwig said.
Kleen Energy Systems had a package of insurance polices brokered by Beecher Carlson of Boston, according to state documents. Kleen had $25 million in liability coverage through Arch Insurance Group and a separate policy through Chartis for up to $10 million in pollution liability during the construction period: Sept. 24, 2007, to Aug. 24, 2010.
Deaths and injuries are generally covered by workers' compensation insurance. The explosion killed five and injured 27. It's not clear who held the workers' compensation policies for those workers, but it could be the contracting companies that employed them, which is the case in other major industrial building projects.