Updated November 18, 2019

October 2, 2015

Summary: Fracking involves the pumping of water and chemicals underground at high pressure to shatter rock formations and release gas. The practice generates a considerable amount of waste liquid, which is often disposed of by injecting it into deep rock formations where it can lubricate faults. This may make it easier for stressed faults to shift and cause an earthquake.

While fracking-related losses would be considered an exclusion under MSO commercial forms, an exclusion for fracking was added to the New Jersey and Pennsylvania endorsements to emphasize the intent of the policy that losses caused by fracking are not covered.

The following exclusion applies to the Businessowners endorsements, BU 08 20 (08 15), New Jersey, and BU 08 10 (10 15) Pennsylvania. The exclusions applicable to the Commercial Umbrella endorsements are MCL 790 (08 15) and MCL 780 (10 15), and the Commercial Property, Commercial Liability, Contractors, House of Worship, and Garage endorsements are MCM 820 (08 15) and MCM 810 (10 15), all contain similar wording.

A.  The following exclusion is added to PART I:

Fracking

We do not provide insurance for any loss or damage arising out of or resulting from fracking. This includes, but is not limited to: any earthquake, earth movement or sinkhole collapse.

However, if loss resulting from fire or explosion, or theft (to the extent otherwise insured by this policy) ensues, we insure such resulting loss.

Analysis

MSO makes clear that property damage and loss resulting from fracking—including resultant earthquake, earth movement, and sinkhole collapse loss or damage—is not covered. However, ensuing fire, explosion, or theft as a result of fracking are covered.

B.  The following exclusion is added to PART II:

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