When most people think of an agribusiness claim, loss of revenue is the first
thing that comes to mind. But with complex operations, the hidden cost can go beyond
financial implications and even result in death. For example, a dust-related explosion
in Texas of 2025 claimed the life of 1
individual, critically injured 3 others, and was eerily reminiscent of the infamous 2008
Imperial Sugar refinery explosion that
killed 14.
These types of events can leave lasting impressions on loss control specialists and stick with them throughout their career. When lives are involved, it is essential to learn from the aftermath and prevent other instances from occurring.
What Challenges Does Agribusiness Pose to Property Insurance?
Agribusiness is a key contributor to our overall success as a society but continues to present significant challenges to the property insurance market. Agribusinesses span a wide range of operations, each with unique risk profiles, machinery, and hazards. Due to their complexity, they are notoriously difficult to secure property coverage for, especially for operations that involve the hazard of producing combustible dust. Given the historical severity of losses, this is understandably so.
Based on April 2026 Occupational Safety and Health Administration
(OSHA) inspection data and safety updates, combustible dust explosions
remain a significant concern, particularly in agriculture, biofuel, and
wood-processing facilities. Operations face a real dilemma, only exacerbated by
their reluctance to conform to best practices and fire protection standards because
of the cost. Not only can high-performing safety equipment be expensive, but
downtime for installation and training is often not prioritized.
In a hardening insurance market, risk profiles containing combustible dust, such as feed mills, flour mills, grain elevators, nut processing facilities, and oilseed processing facilities, are particularly vulnerable and, therefore, subjected to increased rates.
All of this culminates in a vicious cycle where agribusiness owners avoid safety standards to reduce costs, which inevitably leads to a catastrophic event that raises pricing for the entire industry. That's where loss control comes in. By adhering to best practices set by the National Fire Protection Association (NFPA), agribusiness owners with combustible dust in their operations can take the first step in building a more resilient sector.
NFPA 660, the Standard of Combustible Dusts and Particulate Solids
The NFPA's new Standard for Combustible Dusts and Particulate
Solids (NFPA 660) became active on December 6, 2024, and covers industries from
agricultural to metal and wood processing. It replaced the NFPA 61, 484, 652, 654,
655, and 664 to provide new standards for handling combustible dusts. Businesses
should familiarize themselves with changes and the impact on their operations in
order to ensure compliance.
NFPA 660 Key Requirements and Changes
Dust hazard analysis (DHA)
Under the NFPA 660, conducting a DHA is a
critical foundation of any safety plan and contains several
important steps. For example, a flour mill that produces flour dust
would do the following.
Assess
ignition points. Review potential ignition sources,
including static electricity, hot bearings, and friction.
Map dust
accumulation. Identify all areas where dust would
accumulate.
Evaluate
safeguards. Inspect explosion venting on dust
collectors, grounding of equipment, and cleaning
procedures.
Adhere to
risk reduction recommendations. Install dust
collection systems, add suppression systems, and improve
cleaning schedules.
Hazard mitigation strategies
Dust collection systems play a critical role in
mitigating combustible dust risks. Risk management strategies should
be interconnected, drawing from multiple approaches to keep
facilities safe. Best practices include the following.
Control ignition sources.
Implement ventilation improvements.
Perform regular maintenance on dust
collection systems and equipment.
Routinely inspect and maintain critical
equipment and electrical systems in accordance with the NFPA
70 and 70B.
Improve housekeeping measures.
Training and improved safety measures
The NFPA 660 outlines improved safety guidelines
that must be followed.
Chapter 10 of the NFPA 660, which is the
standard, places strong emphasis on program management and
requires a written dust hazard management program along with
documented training and inspections.
Develop and implement a robust Emergency
Action Plan (EAP).
Insulate spark detection devices, flame
arrestors, and automatic suppression systems. The
implementation of the new standard represents a better
chapter in fire safety and should be followed along with the
NFPA 68, 69, and 499 to protect assets, ensure employee
safety, and lower business costs.
Hidden Costs of an Explosion
According to the US Small Business Administration and Federal
Emergency Management Agency data, nearly 40 percent to 90 percent of small
businesses never reopen after a disaster, 25 percent fail within 1 year, and up to
75 percent of businesses without a continuity plan fail within 3 years of a
disaster.
Combustible dust disasters (grain, sugar, flour, etc.) tend to be
high-severity, low-frequency events, and insurers price heavily because of the
severity. Various factors play into the overall cost placed on operations that have
this component in their businesses. According to OSHA inspection data over the last
10 years, multiple loss events resulted in over $100,000 in fines. A staggering $3.7
million fine followed the Imperial Sugar refinery explosion in 2008.
Also, fines are not the only costs connected with catastrophic
explosions.
Injured Workforce
Based on the National Safety Council (NSC) data, burns are among the most expensive lost-time workplace injuries. The average cost of burn care is between $52,000 and $64,000.
Severe burn injuries typically require weeks, if not months, in a burn unit.
Based on 2023–2024 data provided by the NSC, a workplace fatality is approximately $1.5 million.
Loss Production
Damaged production equipment can have long wait times for repair or replacement, resulting in operational downtime. For example, industrial dust collectors frequently explode; however, most businesses don't have a spare available on-site.
Lawsuits
Lawsuits are potentially the most expensive cost linked with dust-related
explosions; injured employees and their families may seek financial
restitution for injuries or damages. The average employment-related lawsuit,
according to the NSC, costs the company around $41,000–$47,000 per claim.
If the injuries are a result of negligence in a personal injury lawsuit, costs can exceed $1 million.
Increased Insurance Premiums
Loss history and litigation continue to play a large role within the
insurance world, and large verdicts and settlements following explosions
have increased insurers' loss reserves notably. Even one high-profile case
can impact pricing across the entire agribusiness landscape.
Reinsurance costs are rising across the board, and operations with
combustible dust hazards are particularly affected. Insurers normally pass
this cost along to their various commercial and industrial clients.
Fewer insurers are writing combustible dust risks, which creates a
supply-demand imbalance. This is exactly why insurers price the risk the way
they do. Operations within the agribusiness sector deal with these pressures
consistently, but costs can be controlled. With the adoption of the NFPA
660, businesses can prove they prioritize risk control, and the
implementation of these safety measures can lead to improved pricing and
terms.
Conclusion
The bottom line is straightforward: Any operation that has a combustible dust component will continue to see higher operating costs until the industry's attitude changes. With an average of eight catastrophic explosions annually and repeated "willful" violations from OSHA, the emphasis on safety is too lax.
Businesses and experts in the fire safety realm have an
opportunity to break the cycle. With the implementation of the NFPA 660, the Combustible Dust National Emphasis
Program, and an emphasis on training, costs and safety can be
improved.
Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.
When most people think of an agribusiness claim, loss of revenue is the first thing that comes to mind. But with complex operations, the hidden cost can go beyond financial implications and even result in death. For example, a dust-related explosion in Texas of 2025 claimed the life of 1 individual, critically injured 3 others, and was eerily reminiscent of the infamous 2008 Imperial Sugar refinery explosion that killed 14.
These types of events can leave lasting impressions on loss control specialists and stick with them throughout their career. When lives are involved, it is essential to learn from the aftermath and prevent other instances from occurring.
What Challenges Does Agribusiness Pose to Property Insurance?
Agribusiness is a key contributor to our overall success as a society but continues to present significant challenges to the property insurance market. Agribusinesses span a wide range of operations, each with unique risk profiles, machinery, and hazards. Due to their complexity, they are notoriously difficult to secure property coverage for, especially for operations that involve the hazard of producing combustible dust. Given the historical severity of losses, this is understandably so.
Based on April 2026 Occupational Safety and Health Administration (OSHA) inspection data and safety updates, combustible dust explosions remain a significant concern, particularly in agriculture, biofuel, and wood-processing facilities. Operations face a real dilemma, only exacerbated by their reluctance to conform to best practices and fire protection standards because of the cost. Not only can high-performing safety equipment be expensive, but downtime for installation and training is often not prioritized.
In a hardening insurance market, risk profiles containing combustible dust, such as feed mills, flour mills, grain elevators, nut processing facilities, and oilseed processing facilities, are particularly vulnerable and, therefore, subjected to increased rates.
All of this culminates in a vicious cycle where agribusiness owners avoid safety standards to reduce costs, which inevitably leads to a catastrophic event that raises pricing for the entire industry. That's where loss control comes in. By adhering to best practices set by the National Fire Protection Association (NFPA), agribusiness owners with combustible dust in their operations can take the first step in building a more resilient sector.
NFPA 660, the Standard of Combustible Dusts and Particulate Solids
The NFPA's new Standard for Combustible Dusts and Particulate Solids (NFPA 660) became active on December 6, 2024, and covers industries from agricultural to metal and wood processing. It replaced the NFPA 61, 484, 652, 654, 655, and 664 to provide new standards for handling combustible dusts. Businesses should familiarize themselves with changes and the impact on their operations in order to ensure compliance.
NFPA 660 Key Requirements and Changes
Hidden Costs of an Explosion
According to the US Small Business Administration and Federal Emergency Management Agency data, nearly 40 percent to 90 percent of small businesses never reopen after a disaster, 25 percent fail within 1 year, and up to 75 percent of businesses without a continuity plan fail within 3 years of a disaster.
Combustible dust disasters (grain, sugar, flour, etc.) tend to be high-severity, low-frequency events, and insurers price heavily because of the severity. Various factors play into the overall cost placed on operations that have this component in their businesses. According to OSHA inspection data over the last 10 years, multiple loss events resulted in over $100,000 in fines. A staggering $3.7 million fine followed the Imperial Sugar refinery explosion in 2008.
Also, fines are not the only costs connected with catastrophic explosions.
Injured Workforce
Loss Production
Lawsuits
Increased Insurance Premiums
Conclusion
The bottom line is straightforward: Any operation that has a combustible dust component will continue to see higher operating costs until the industry's attitude changes. With an average of eight catastrophic explosions annually and repeated "willful" violations from OSHA, the emphasis on safety is too lax.
Businesses and experts in the fire safety realm have an opportunity to break the cycle. With the implementation of the NFPA 660, the Combustible Dust National Emphasis Program, and an emphasis on training, costs and safety can be improved.
Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.