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Mudslide is not an explosion (US)

24 October 2016 Patrick Bracher, Norton Rose Fulbright
Patrick Bracher from Norton Rose Fulbright.

Patrick Bracher from Norton Rose Fulbright.

An insured unsuccessfully contended that the destruction of a building during a mudslide was an explosion under the policy terms.

Torrential rain in Boulder, Colorado in September 2013 triggered a mudslide that cascaded down a hill and destroyed the property, leading to a loss of $1.3 million. The policy excluded losses due to water-based causes, including mudslides, but included cover for an explosion.

The court said that the building did not explode in any traditional sense of the word: ‘What makes most sense in the present context is the classical notion of an explosion, as from a bomb or leaking gas.’

The fact that the water, mud and debris caused the building to suddenly break apart did not mean it was damaged by an explosion even without a definition of explosion in the policy.

The outcome of this case is hardly surprising.

(Paros Properties LLC v Colorado Casualty Insurance Co.)

First published by Financial Institutions Legal Snapshot.

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