Summary: A standard feature of property insurance forms is the coverage for “direct physical loss of or damage to” covered property caused by or resulting from explosion. This provision was originally one of the extended coverages that first expanded the scope of the fire form. Since loss caused by explosion is more strictly delineated in the commercial property forms, this discussion focuses primarily on losses under commercial policies. This treatment deals with various court interpretations of explosion. All of the cases in this discussion have been verified as valid case law; none have been overturned.

Topics covered:
Policy language
What is “explosion”?
Cases favoring insurer
Cases favoring insured

Policy Language

The explosion clause found in the causes of loss basic and broad forms of the commercial property program of Insurance Services Office (CP 10 10 06 07 and CP 10 20 06 07, respectively) states that explosion includes “the explosion of gases or fuel within the furnace of any fired vessel or within the flues or passages through which the gases of combustion pass.” However, this cause of loss does not include loss or damage by “rupture, bursting or operation of pressure relief devices; or rupture or bursting due to expansion or swelling of the contents of any building or structure, caused by or resulting from water.”

Language that further restricts coverage is in the exclusions section of the policies. There is no coverage for explosion caused by or resulting from “explosion of steam boilers, steam pipes, steam engines or steam turbines” that the insured owns or operates. If loss or damage by fire or combustion explosion results, the insurer will pay for the resulting loss or damage. And finally, there is no coverage for explosion caused by or resulting from “mechanical breakdown, including rupture or bursting caused by centrifugal force.” This exclusion contains a broader exception than the others previously noted in that “if loss or damage by a Covered Cause of Loss results, we will pay for that resulting loss or damage.”

All damage from steam boilers or turbines is not ruled out by the exclusion. Damage caused by the explosion of a neighbor's steam boiler is covered. Similarly, a tenant insured has coverage for damage caused by explosion of the landlord's steam boiler. Also, the exclusion does not eliminate damage to steam boilers and the other listed devices when the explosion emanates from another source. If explosion is caused by a leak in a gas line, for example, the resulting damage to a steam boiler is covered the same as any other property. On the other hand, when the explosion originates in the steam boiler (and the unit is owned, leased, or controlled by the insured) all damage—to any property—is  excluded.

What Is “Explosion”?

The absence of a specific definition of “explosion” has created much confusion. Many courts have found that the meaning of “explosion” must be determined from the specific facts of each particular case, but that the most important element of an explosion is that a confined substance suddenly, and because of active internal pressure, breaks from its confinement. The degree of violence may vary. Courts frequently rely on dictionary definitions of explosion; yet at least one court has refused to follow this approach, viewing it as simplistic. It is clear, however, that the meaning is not restricted to explosions involving combustion, such as of gunpowder, dynamite, inflammable vapors, and other substances commonly thought of as causing explosions.

One court, in Stone Container Corp. v. Hartford Steam Boiler Inspection and Ins. Co., 165 F.3d 1157 (7th Cir. 1999), said that when the term is not defined in an insurance contract, it is given its ordinary language meaning. It listed some examples of the use of “explosion” in ordinary speech: “explosion of an atomic bomb. . .volcanic explosions. . .'explosion' of a tire caused by a blowout. . .explosion of a melon caused by a bullet. . .explosion of a boiler as a result of the failure of a valve to open.”

The discussion that follows begins with a review of court decisions supporting the insurers' views and ends with court decisions upholding the insureds' positions.

Cases Favoring Insurer

“Implosion” was differentiated from “explosion” in Allen v. Manhattan Fire and Marine Ins. Co., 519 S.W.2d 706 (Tex. Civ. App. 1975). The Texas appeals court determined that the destruction of a tank truck was caused by implosion—an internal collapse followed immediately by an outward rush of air that is not caused by the ignition of combustible gases. Implosion is distinguishable from explosion, which requires the “breaking forth of a confined substance.” The parties agreed to the meaning of implosion and to the fact that the occurrence did not result from the breaking forth of a confined substance. The insured apparently wanted a ruling that coverage for explosion included implosion, as well, because “explosion” was an ambiguous term. The court found that an explosion caused a rupture, whereas here the rupture occurred first.

A Louisiana court of appeals ruled in Schmieder v. State Farm Fire and Casualty Co., 339 So.2d 390 (La. App. 1976), that evidence showed that a design failure, and not an explosion, was responsible for the collapse of a roof and subsequent collapse of walls. The insured had stored gasoline, cleaning solvents, and glue, which exploded, in a stairwell. The insured argued that the term “explosion” was ambiguous because it was undefined, and therefore should be interpreted in its broadest sense to mean any sudden release or relinquishment of energy causing a break or rupture and accompanied by a loud noise. The insured called two witnesses, one of whom stated that the damage was caused by an explosion set off by an electrical spark or arcing from the control panel located near the stairwell where the combustibles were stored. The other stated that the damage was caused by the contraction of the concrete roof while it was drying, and other stresses. The insurer called four witnesses, all of whom testified that the changes from the original design and resulting structural weakness caused the collapse.

The court noted that dictionaries contain many definitions of the term “explosion,” and that the case law of other jurisdictions favored the rule that the word “explosion” has no fixed meaning in the law. The court stated: “Most authorities hold 'explosion' is a general term unlimited in application and dependent upon concept of degrees. Its true meaning in a given instance must be determined, not by a fixed criteria or precise measurement, but by the common experiences and notions of ordinary individuals in matters of this nature.” Applying these rules of interpretation, it was held that the building fell because of faulty design and construction. (Note that this case occurred before the insertion of the concurrent causation language into the commercial property policy. See Causes of Loss Forms.)

In Aetna Casualty & Surety Co. v. Osborne McMillan Elevator Co., 132 N.W.2d 510 (Wis. 1965) the Wisconsin Supreme Court determined that there is no explosion when a container ruptures or bursts open because of structural weakness rather than because of the contents' own force. A tank containing wheat ruptured during an exceptionally cold January night. Evidence was presented showing that the tank had contracted in the cold weather and was made brittle by the extreme temperature. The court found that the trial court was in error for not having applied the following rule from an earlier case. The court stated:

The plain doctrine of the case is that an explosion as applied to silage in a silo or contents of a container must include the element of an active force independent of or in addition to the force of weight and height of the contents which seeks a sudden and violent release by breaking the container. Static or potential force or pressure resulting only from the weight of the contents in a container may cause a container to split open and release the contents but such an occurrence is hardly looked upon by the average person to be an explosion.

Finding that the trial court's instructions to the jury were prejudicially erroneous in the insured's favor, the case was sent back for a new trial on the question of whether there was an active force in the wheat and what relationship such force had to the fracture caused by the brittleness of the tank.

Before returning the case to the trial level, the court stated its views on “explosion”:

There seems to be little dispute in the cases that an explosion as commonly understood is not one element such as an increase in pressure or noise or a result such as a fractured container, but the sum total of several elements not the least of which consists of an active force which suddenly and violently exerts itself in some form. In explodable substances the force exerts itself primarily in the substance through a chemical change or nuclear reaction or other process while in a non-exploding substance in a container the active force does not change the composition of the substance but acts through the substance in breaking out of the container. In cases of confined substances if the container fails because of structural weakness so as to let out the contents as distinguished from the contents bursting out because of its force, there is no explosion…In explosions involving a nonexplodable substance there must be an internal active force created which breaks out of its confinement. In the case of grain such active force must be in addition to that of the normal static force exerted on the inside of the container because of the weight and position of the grain.

The court explained that the nonexplodable substance of water had been found to have caused explosions in cases of water hammer, a situation where an increase in water pressure occurs in the flow of water because of sudden stoppage. The active pressure is sometimes enough to suddenly break the water pipe. The court also noted a case where grain became wet due to flood and began to rot, so that the rupture of the silo was caused by a build up of gases or by the expansion of the grain, and the jury found that an explosion had occurred.

A federal appeals court applied Texas law in American Casualty Co. of Reading, Pa. v. Myrick, 304 F.2d 179 (5th Cir. 1962), and found insufficient evidence to support a finding that an explosion of ammonia gas in refrigerating coils had caused the contamination of the insured's poultry, eggs, and similar products. The insured's storage room was cooled by overhead coils through which flowed an ammonia coolant under pressure. The coils, which had a six month's accumulation of ice on them, weighed several tons. The coils were defrosted by increasing the pressure. On the morning of the accident, the insured's employee increased the pressure for this purpose and noticed gas coming from underneath the storage room door. When the door was unlocked the whole room was found to be filled with clouds of ammonia, and the coils were on the floor and separated from the supply pipe. No one had heard or seen the coils fall. All of the food in the storage room was rendered worthless.

The insured was covered under two policies, one an open perils policy excluding loss by contamination “unless caused by or resulting from…explosion,” and the other a specified perils policy with coverage for loss by explosion. The insured took the position that when the coils separated from the supply pipe, there was sufficient violence in the release of ammonia to constitute an explosion. Noting that the Texas courts had not found an “all inclusive and fixed” definition for “explosion,” the court nevertheless found that the cases shared a common characteristic, stating, “In each instance, a confined substance suddenly and with varying degrees of violence breaks from its confinement as a result of an internal pressure.” The court found that three of the insured's witnesses supported the view that the pressure within the coils rapidly dissipated when released but did not support the inference that the pressure within the coils caused the break. The fourth witness simply speculated as to the cause of the loss.

In a 1983 “chicken or egg” case, the Washington Supreme Court sent a case back for jury trial on the question of whether the eruption of Mt. St. Helens was an explosion; and, if so, whether the explosion was preceded by earth movement, and whether appellants' damages were proximately caused by the explosion of Mt. St. Helens. In other words, if the lava forcing its way to the surface was considered earth movement, then losses from the explosion—with ensuing mudflow—would be covered.

The 1980 eruption of Mt. St. Helens had caused the ice and snow on the mountain to melt, and this water, along with torrential rains resulting from the eruption cloud, other ground water, water from Spirit Lake, and eruption debris, started mudflows. The insureds' homes were twenty miles from the mountain, and were destroyed by mudflow, or by a combination of flooding and mudflow. The three policies involved excluded loss from earth movement and flood but covered direct loss by explosion ensuing from earth movement. The insurers rejected the insureds' claims on the basis of the earth movement and water damage exclusions. The trial court granted judgment in the insurers' favor without a trial. It assumed for purposes of the ruling that the movement of Mt. St. Helens was an explosion within the terms of the insurance policies, but found that the exclusions applied because the excluded causes of loss were the direct and efficient causes of the loss. The court held that whether the volcanic eruption was an explosion was for a jury to decide, as was the question of whether, if it was an explosion, it ensued from earth movement. See Graham v. Public Employees Mut. Ins. Co., 656 P.2d 1077 (Wash. 1983).

Cases Favoring Insured

A federal court of appeals, applying Illinois law, held in Pre-Cast Concrete Products, Inc. v. Home Ins. Co., 417 F.2d 1323 (7th Cir. 1969) that an explosion occurs when the pressure inside a container exceeds the strength of the container and results in a sudden release of pressure. The insured's place of business was mostly destroyed by the explosion of an autoclave used to cure concrete blocks. An autoclave is a cylindrical pressure container (in this case with a diameter of eight feet and a length of 92 feet). The container was designed to build up pressure to a maximum of 150 lbs. per square inch. When the explosion took place the steam pressure in the autoclave had reached 124 lbs. per square inch. The door was blown off and hurled several hundred feet and the autoclave itself was propelled about one hundred feet in the other direction. The parties stipulated that “[a]s far as is presently known, no sudden increase in internal pressure occurred.” The trial court had held that no explosion had occurred, stating that an explosion “is what happens when pressure suddenly is built up in a container to a point sufficiently in excess of the normal capacity of the container to contain it, so that the container suddenly and violently gives way.”

“Explosion” was not defined by the policy and the insurer conceded that coverage was not denied because of a specific exclusion within the policy. Therefore, the appeals court found the issue to be “whether or not such violent and sudden release of steam from a container operating at below maximum pressure is an 'explosion,' as that term is commonly understood.” The appeals court rejected the argument that the build up of pressure must be sudden, saying, “The difference between the violent bursting of a steam boiler which is suddenly heated and one which gradually builds up an abnormal amount of pressure is beyond our comprehension. Had the autoclave in the instant case slowly built up pressure in excess of its maximum 150 lbs. psi, resulting in a violent rupture, could [the insurer] plausibly argue that no explosion occurred since the excessive pressure had not developed suddenly? The policy itself, by its inclusion of 'explosion, rupture, or bursting of: (a) steam boilers, steam pipes, steam turbines, or steam engines…'seems to contemplate the opposite result.”

Following this reasoning the court held that when the pressure inside the container exceeds the strength of the container and results in a sudden release of pressure, there is an explosion, whether this happens when a higher than normal internal pressure exceeds the natural breaking point of the container or when, under normal conditions, there is a decrease in the natural breaking point of the container. The court quoted with approval from Aetna Casualty & Surety Co. v. Osborne-McMillan Elevator Co., 151 N.W.2d 113 (Wis. 1967), wherein the court had said: “There is a distinction between a sudden and violent increase and a sudden and violent release. It is the sudden and violent release of the force which is an essential element of an explosion.”

The court noted that “explosion” was not defined in the policy and that “vigorous contention exists over the definition of that term.” Therefore, the court found the term ambiguous and adopted a meaning most favorable to the insured.

In another case involving the release of ammonia from a refrigeration system, Oroville Cordell Fruit Growers, Inc. v. Minneapolis Fire & Marine Ins. Co., 434 P.2d 3 (Wash. 1967), the Washington Supreme Court held that the evidence supported a finding that the bursting of a refrigeration system pipe, resulting in release of ammonia that damaged apples stored in a warehouse, constituted an explosion. The trial court heard evidence on the question of whether the ammonia escaped because of an explosion or through some more gradual means. In analyzing the findings of fact, the supreme court applied the following definition of “explosion” from Merriam Webster's International Dictionary, 3rd Edition: “[A] violent expansion or bursting that is accompanied by noise and is caused by a sudden release of energy…from an escape of gases or vapors under pressure.” The supreme court said that although there was considerable controversy over the evidence, the trial court's findings of fact were supported by substantial evidence and would not be set aside. Among these findings of fact was the fact that the aluminum tube was not completely corroded, although it was highly corroded on the outside; that the type and size of hole which resulted in the tubing could only be the result of explosion (there was an elongated opening, as opposed to the pinhole leak that could be expected if corrosion had caused the opening); and there was noise and violence accompanying the explosion.

A Pennsylvania court said that a shotgun blast constituted an explosion in Weisman v. The Green Tree Ins. Co., 670 A.2d 160 (Pa. Super 1996). A tenant of the Weismans committed suicide with a shotgun on the premises. They incurred emergency cleanup costs, lost rent, and repair costs. Their insurer, Green Tree, denied coverage. The trial court found that the loss was covered as explosion was a covered peril, and the court deemed the shotgun blast to be an explosion.

The Superior Court of Pennsylvania construed the term according to a common definition. Webster's defined “explosion” as “to burst forth with sudden violence or noise from internal energy.” The court concluded that, although a shotgun blast is not usually called an explosion, it still fit within a broad reading of the definition. The term, therefore, was subject to more than one interpretation of its meaning by reasonably intelligent persons and found ambiguous. Thus, it was decided in favor of the insureds.