Mine Explosion Draws Criticism, Interrupts Business

04/12/2010

A recent explosion at a West Virginia mine left some 25 workers dead and Massey Energy Co. facing severe safety criticism.

Such criticisms about safety violations may be unfounded, according to a report by Reuters citing a letter the company sent to its shareholders. The letter explained that Massey's safety record met the industry average and that it currently has the insurance necessary to cover claims in this regard.

However, the blast at the Upper Big Branch mine could lead to lost revenue due to business interruption, according to the report.

"We are currently working on plans to mitigate the lost production at UBB by increasing production at other mines. We have a significant amount of mining equipment available that can be deployed as well as mines where we can produce additional coal similar in quality to that of UBB," the letter said.
Business interruption insurance is one way companies may be able to compensate lost income suffered after a disaster renders one's office or equipment unusable. This coverage is sold as part of a package policy or property insurance policy with premiums reflecting the risk level.

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