BBQ Season Brings Coverage Conundrum

Originally published by Anne-Marie Abarado.

It’s camping and barbecue season, and that usually involves more propane gas usage.  Injuries resulting from the emission of propane gas may not be covered under certain insurance policies.  Commercial general liability, homeowner, and auto insurance policies often have a pollution exclusion which excludes coverage for damage to property or injuries resulting from certain pollutants.

Propane is classified as an asphyxiant gas and exposure to levels above 2,100 ppm is considered immediately dangerous to life or health. See The National Institute for Occupational Safety and Health, Immediately Dangerous to Life or Health (IDLH) Values. To determine whether a substance qualifies as a pollutant under a policy, Texas courts have looked primarily at the definition of a pollutant under the policy and the plaintiff’s pleadings.  “[S]ubstances need not be released into the surrounding environment to qualify as pollutants for purposes of a pollution exclusion clause.”  Noble Energy, Inc. v. Bituminous Cas. Co., 529 F.3d 642, 649 (5th Cir. 2008)

No cases in Texas have addressed whether propane is per se a pollutant, but other jurisdictions have determined that carbon monoxide emitted as a result of using propane-powered items are pollutants.  See Bituminous Cas. Corp. v. Sand Livestock Systems, Inc., 728 N.W.2d 216 (Iowa 2007) (carbon monoxide fumes, which were produced by propane gas heater for pressure washer in facility’s washroom, caused employee’s death by asphyxiation and was determined to be a pollutant because it was “a gaseous irritant or contaminant released from the propane washer”); Cont’l Cas. Co. v. Advance Terrazzo & Tile Co., Inc., 462 F.3d 1002, 1009 (8th Cir. 2006) (carbon monoxide gas released from insured subcontractor’s propane-powered terrazzo floor grinders was a pollutant under pollution exclusion).   The Fifth Circuit Court of Appeals and Texas courts have determined that carbon monoxide and certain gases are pollutants under the pollution exclusion clauses in a policy.  See Nautilus Ins. Co. v. Country Oaks Apts., Ltd., 566 F.3d 452, 453-54 (5^th Cir. 2009) (holding a “total” pollution exclusion precluded coverage for a claim based on fetal exposure to injurious levels of carbon monoxide emanating from a blocked furnace vent in the plaintiff’s apartment); Certain Underwriters, 112 F.3d at 188 (“the phenol gas emission constituted bodily-injuring pollution or contamination” and precluded coverage under the pollution exclusion clause).   Even if a plaintiff argues that carbon monoxide was not released as a result of a propane leak, a Texas court will likely find that propane qualifies as an “irritant” or “contaminant” because it is an asphyxiant gas and exposure to it at levels above 2,100 ppm is considered immediately dangerous to life or health.  See Colony Nat. Ins. Co. v. Specialty Trailer Leasing, Inc., 620 F. Supp. 2d 786, 790 (N.D. Tex. 2009) (holding “dangerously elevated concentrations of argon [gas] are a pollutant as a matter of law” under the absolute exclusion even though argon gas appears naturally in the atmosphere without causing injury).  Based on these decisions, Texas courts will likely find that propane or the carbon monoxide emitted from propane-powered items is a pollutants and thus, the pollution exclusion in the policy would exclude coverage.

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