In the first, Essex Insurance Co. v. Tri-Town Corp, 863 F.Supp. 38 (D. Mass. 1994) the court upheld the exclusion when a malfunctioning Zamboni machine emitted carbon monoxide into an ice rink. But a court in Pennsylvania reached a different conclusion with reference to the same exclusion. A hot water heater malfunctioned, allowing carbon monoxide to infiltrate a restaurant, resulting in bodily injury. The court looked at Tri-Town, and noted that the word “atmosphere” had not been discussed. The court said that “the exclusion is worded broadly to encompass the natural resources of this planet in their natural setting… within the context of the pollution exclusion, the distinction is not in the air itself but where the air happens to be… We conclude, therefore, that the term 'atmosphere' in the pollution exclusion does not exclude coverage under the primary policies for the contamination or pollution of air within a building.” (This case is Gamble Farm Inn Inc. v. Selective Insurance Co., 656 A.2d 142 (Pa. Super. 1995).

That brings us to American States Insurance Co. v. Koloms, 687 N.E.2d 72 ( Ill. 1997). Here, tenants in a building owned by the Koloms were sickened by carbon monoxide fumes from a furnace. The Illinois Supreme Court considered Gamble Farm Inn, noting that the court said the exclusion was ambiguous, and considered other cases that denied coverage on the grounds that the exclusion was plain and unambiguous. The court said “we agree with those courts which have restricted the exclusion's otherwise potentially limitless application to only those hazards traditionally associated with environmental pollution. We find support for our decision in the drafting history of the exclusion, which reveals an intent on the part of the insurance industry to so limit the clause.”

And this approach appears to be the fairest to your insured. There would be no coverage for negligently discharging oil or gas into a storm drain or water supply, say, but there is coverage when, as in this case, a space heater malfunctions.

We also noted in the policy the statement that “the exclusion does not apply to liability resulting from the use of product [sic] used in the cleaning or maintenance of the household or residence premises.” The space heater can be viewed as a product used in the maintenance of the residence premises in that it is used to maintain heat.

So, given the courts' findings and this exception, we think the claim against the insured for bodily injury is covered. We do not think the insured's wife has a claim against the policy, because most homeowners forms exclude coverage for bodily injury to an insured. You will want to review the policy's exclusions.