What are PFAS chemicals?

Per- and polyfluoroalkyl substances (PFAS) are a group of man-made chemicals that includes PFOA, PFOS, GenX, and many other chemicals. This group of elements has been nicknamed “forever chemicals” because of the belief that they remain persistent in our environment and bodies for an undetermined period of time. The properties that make these chemicals so desired for product manufacturing—including their ability to repel water and oil—are also the reasons why they don’t break down and may stay in the environment well past their original intended use.

PFAS are found in a wide range of consumer products, including: stain repellents, food containers, cookware, and many other everyday products. The benefit of using these chemicals is that they are resistant to grease, oil, water, and heat. They can be found in:

• Food packaged in PFAS-containing materials, processed with equipment that used PFAS, or grown in PFAS-contaminated soil or water.
• Workplace, including production facilities or industries (e.g., electronics manufacturing, furniture, etc.) that use PFAS.
• Commercial household products, including stain- and water-repellent fabrics, waxes, adhesives, nonstick products, paints, cleaning products, and fire-fighting foams.
• Drinking water, typically concentrated geographically and associated with a specific facility or industry (e.g., manufacturer, landfill, wastewater treatment plant, etc.)

In 2019, several companies were involved in lawsuits for their use of PFAS substances, most notably the industrial giant 3M, for spills that impacted water bodies, as well as manufacturers that use its chemicals. The company has set aside hundreds of millions of dollars to cover legal claims, but some estimates of the eventual cost exceed $10 billion. Another product being targeted is firefighting foam, proven to have caused unsafe levels of PFAS in ground and water samples across the country. The pervasive nature of these chemicals—and the uncertainty of how to effectively clean them up—have been the main concerns surrounding this exposure.

Is this exposure insurable? How are insurance carriers responding to this risk?

The heightened public awareness of PFAS use has led to both businesses and consumers being more informed about this exposure. Not only are the companies who use these chemicals taking more operational and safety precautions, regulations are being put into place to prevent the misuse and/or accidental release. There is also a movement to outlaw certain types of these substances from being used in the United States, furthering the efforts to gain control of problems relating to PFAS emissions. But since federal regulation is still ongoing, the states are often left to regulate PFAS use, often inconsistently.

Since this is still considered an “emerging contaminant” by most underwriters’ standards, insurance companies are finding it hard to underwrite risks associated with it. Many carriers have blanket exclusions for PFAS in their policies and some underwriters are reluctant to take on accounts where this exposure may be present. But as scientists and law makers learn more about this class of chemicals and insurers develop a clearer picture of the cleanup associated with it, we expect there to be a better understanding of how to address these substances from an insurability perspective.

Do you have any accounts with a PFAS exposure? Let us know what you think!

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Information for this article was obtained from the following sources:

https://www.epa.gov/pfas/basic-information-pfas

https://www.cnn.com/2019/02/14/health/what-are-pfas-chemicals/index.html

https://www.insurancejournal.com/news/national/2019/08/28/538163.htm

https://cen.acs.org/environment/persistent-pollutants/Chemical-companies-spar-over-PFAS/97/i36

http://www.startribune.com/rash-of-lawsuits-intensify-concerns-of-3m-s-liabilities-over-pfas-chemicals/566423442/