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Gas Leaks and Explosions

Natural gas and propane losses range from a small fire at an appliance to an explosion that levels a home and damages the neighbors. Gas doesn't leak on its own. Something failed or someone made a mistake: a utility line, a meter, a connector, a plumber's fitting, an appliance valve, an excavator who hit a line, or a propane company that skipped a leak check. Utilities, gas companies, and regulators move in fast after these events, so secure the evidence and put everyone on notice on day one.

What it coversUtilities, propane companies, plumbers, connectors, CSST bonding, 811 dig records

Step-by-step checklist

Identify

Contact the claim adjuster right away. Ask them to hold the scene and for permission to retain an expert at the client's expense. Note the call in the file.
On every claim, ask the client whether they want an origin and cause investigator to review the scene, or confirm one is already assigned. Note their answer in the file so the decision is on record.
Make sure no evidence is touched or moved until the expert has secured the scene
Get the client's approval for the scene exam cost. Most run at least $1,600 with travel, the day rate, and expenses.
Find out if it was natural gas or propane, and who supplies it
Find where the gas escaped: outside line, meter, house piping, connector, or appliance
Ask about any recent gas work, appliance installs, digging, or propane deliveries

Hands off until the expert arrives. Nothing at the scene gets touched, moved, repaired, or thrown out until the origin and cause investigator has secured it. Evidence that's moved early can sink the whole recovery.

Notify

Retain an origin-and-cause expert and a gas systems engineer right away
Put the utility or propane company, plumber, installer, excavator, and manufacturers on notice
Ask the utility in writing to preserve the meter, regulator, service line, and its records

Investigate

Hold the joint scene exam before anything is removed or repaired
Request the utility's leak calls, odor complaints, and incident reports
Pull 811 dig ticket records for the area
Lab-test failed parts, then review the expert's report

Demand

Review payments and out-of-pocket costs
Sort the supports into photos, estimates, invoices, mitigation records, and reports
Send the full demand packet

Negotiate

Follow up. No response? Send the second demand.
Check the utility's tariff for any limits on its liability
If liability is accepted, negotiate. If not, review for ADR.

Settle

Review the release
Receive payment, issue the deductible and client payments
Final file review, then close

1. Identify

Common causes

A leak in the utility's service line or at the meter or regulator
An excavator, landscaper, or fence installer hits a buried line
A plumber or installer leaves a loose fitting, an uncapped line, or a bad connection
A flexible appliance connector cracks, kinks, or is reused when it shouldn't be
Yellow flexible gas piping (CSST) is damaged by lightning because it wasn't properly bonded
An appliance gas valve or control fails
A propane company fills an empty tank without checking the system for leaks, or sets the tank or regulator wrong
The gas wasn't odorized enough to smell, so no one knew it was leaking

Who owns what

In general, the utility owns and maintains the gas main, the service line, and the meter, and the property owner is responsible for the piping after the meter. Some utilities own the service line all the way to the building, so check that utility's rules. For propane, the propane company often owns the tank and may own the regulator.

Who may be responsible

What you find	Likely cause	Who may be responsible
Leak at the meter, regulator, or service line	Utility equipment	The gas utility
Line hit during digging	Excavation damage	The excavator, and possibly the utility or locator if the line was marked wrong
Leak at a fitting after recent gas work	Poor installation	The plumber or installer
Cracked or kinked appliance connector	Defect, or poor installation	The connector maker, or the appliance installer
Holes in yellow gas tubing after a lightning strike	Missing or poor bonding	The installer, electrician, or builder, and possibly the tubing maker
Appliance valve or control failed	Product defect	The appliance or valve maker
Leak after a propane delivery or tank set	Skipped leak check, or poor setup	The propane company
No gas smell reported before the explosion	Not enough odorant	The utility or propane supplier

Responsible parties to consider

The natural gas utility
The propane supplier
Plumbers, HVAC contractors, and appliance installers who worked on gas lines
Excavators, landscapers, fence and irrigation installers, and utility locating companies
Builders and electricians, for tubing bonding
Makers of connectors, tubing, valves, regulators, and appliances
A landlord, if the insured is a tenant

2. Notify and investigate

Move fast, and in writing. After a gas event, the utility usually shuts off the gas, pulls the meter, and may repair or replace its equipment right away. Ask the utility in writing to preserve the meter, regulator, service line sections, and all records. Don't let anyone take the gas piping apart before the joint exam.

Records to request

The utility's leak calls, odor complaints, service orders, and leak surveys for the address and the street
The utility's incident report, and any report filed with state regulators or PHMSA, the federal pipeline safety agency
Odorant testing records for the area
811 dig tickets and locate marks for the area in the weeks before the loss
Invoices and permits for any recent gas work or appliance installs
Propane delivery tickets, leak check records, and the tank's ownership and service history
Fire department report and 911 call times

Finding the gas company's claims contact. Add each party to your letter with the Party Finder. Many utilities sell both gas and electric, so check the Subrobuddy Utility Directory too. It lists electric utilities for now, and gas-only companies are coming.

Who to put on notice

The gas utility or propane supplier
Any plumber, installer, or contractor who worked on the gas system
Any excavator, and the locating company
The makers of the connector, tubing, valve, regulator, or appliance
Each party's carrier, once known

Evidence checklist

Photos and video of the meter, regulator, service line, piping, connectors, and appliances before anything is moved
The meter, regulator, and service line sections, held by the utility for a joint exam
House piping, connectors, and appliance valves, held for the joint exam
Locate marks and paint on the ground, photographed before they fade
Neighbors' statements about gas smells before the event
Mitigation, board-up, and cleanup records

Exams

Hold a joint scene exam before anything is removed or repaired, with the utility, contractors, and manufacturers notified. Pressure tests and part testing should happen at a joint lab exam, because they can change the evidence.

3. Demand, negotiate, and settle

Liability theories

Against the utility or propane supplier: negligence in maintaining lines and equipment, responding to leak calls, odorizing gas, or checking systems for leaks
Against a plumber or installer: negligent installation or repair
Against an excavator: negligence, and violating the state's dig laws, such as not calling 811 first
Against manufacturers: product defect, failure to warn, and breach of warranty

Defenses to expect

Defense	How to answer it
The leak was on the customer's side of the meter	Your expert's findings on where the gas escaped. Then look at who worked on that piping.
Our tariff limits our liability	Read the tariff filed with the state regulator. Many limits don't cover gross negligence, or only apply to service interruptions.
The excavator called 811, so the locator is at fault	Get the dig ticket and the locate records. Both may share responsibility.
The appliance was installed by the homeowner	You may still have a product claim if the part was defective.
Lightning is an act of nature	For damaged gas tubing, the question is whether it was bonded as the maker required.

Negotiating and settling

Explosions often damage neighboring homes too. Expect several carriers and consider working together on expert costs.
Utilities usually have their own claims departments and outside counsel. Expect them to run their own investigation.
Review the release with the release checklist, then close with the standard closing letter and the deductible reimbursement letter.

4. Letters for this loss

Step	Letter	Sent to
Identify	Subrogation Opening Letter to Insured	Insured: recent gas work, deliveries, photos
Notify	Notice of Subrogation Interest and Insurance Request	Utility or propane company, plumber, installer, excavator, manufacturers
Notify	Notice of Subrogation Interest to Adverse Carrier	Each party's carrier
Investigate	Evidence Preservation and Joint Scene Exam Notice and to Responsible Party	All parties, including the utility
Investigate	Joint Lab Exam Notice	All parties, before pressure tests or part testing
Demand	Subrogation Demand to Adverse Carrier	Carrier(s)
Negotiate	Second Demand with Escalation Notice, Tolling Agreement Request	Carrier(s)
Settle	Release Review Checklist, Closing (Made Whole) or Pro Rata, Deductible Reimbursement	Client and insured

Sources