I use two round coolers with my system. Rims tube for the mash tun, 1500w element in the hlt cooler. I've had the element in the hlt cooler for a little over a year. No issues. No scorching or melting. I like to heat up water over night so in the morning it only loses 10-15 degrees and you can get a head start on brew day.
If you run it dry the element will burn out quite fast and you will realize it. I highly doubt the cooler will combust instantaneously. But this is just my opinion, not tempted to test it. There are many things that could be dangerous in brewing if you are not careful.