In October, the Biden Administration launched a plan to designate some chemicals classified as perfluoroalkyl and polyfluoroalkyl substances, or PFAS, as hazardous substances under 1980 federal law, putting the chemicals’ manufacturers and other distributors on the hook for cleaning up contaminated sites.
According to the EPA, the chemicals have been connected to a long-range of health issues, including high cholesterol, a suppressed immune system, infertility, several cancers, and decreased vaccination efficiency.
So, how does all of this relate to the insurance industry? According to a recent whitepaper published by Environmental Risk Professionals, obtaining pollution liability insurance coverage to protect your company from PFAS-related lawsuits might be tough. Many insurers have policy limitations or blanket exclusions for PFAS-related claims. However, some carriers will tailor coverage based on information provided by an insured. For historical PFAS use, environmental due diligence, including on-site sampling, may be required. To learn more about current PFAS use, underwriters may need more information about how chemicals are stored and used, and wastes handled to craft coverage. A company seeking pollution liability insurance coverage for PFAS chemicals can benefit from providing environmental due diligence reports for review or by participating in a phone survey to better help carriers understand current or past PFAS use and controls.
“For a business to protect its financial integrity, various risk management options need to be considered,” said David Cooper, INSURICA Risk Consultant. “From the transfer of risk to the assumption of risk, there needs to be a plan chosen for risk. Part of this plan may include insurance coverage for the environmental risks facing businesses today. “
The Environmental Protection Agency (EPA) has developed the PFAS Strategic Roadmap—laying out a whole-of-agency approach to addressing PFAS. The roadmap sets timelines by which EPA plans to take specific actions and commits to bolder new policies to safeguard public health, protect the environment, and hold polluters accountable. The actions described in the PFAS Roadmap each represent important and meaningful steps to safeguard communities from PFAS contamination.
The PFAS Strategic Roadmap includes:
- Aggressive timelines to set enforceable drinking water limits under the Safe Drinking Water Act to ensure water is safe to drink in every community.
- A hazardous substance designation under CERCLA, to strengthen the ability to hold polluters financially accountable.
- Timelines for action—whether it is data collection or rulemaking—on Effluent Guideline Limitations under the Clean Water Act for nine industrial categories.
- A review of past actions on PFAS taken under the Toxic Substances Control Act to address those that are insufficiently protective.
- Increased monitoring, data collection and research so that the agency can identify what actions are needed and when to take them.
- A final toxicity assessment for GenX, which can be used to develop health advisories that will help communities make informed decisions to better protect human health and ecological wellness.
- Continued efforts to build the technical foundation needed on PFAS air emissions to inform future actions under the Clean Air Act.
White house officials also say The Department of Defense (DOD) is currently conducting PFAS cleanup assessments at the nearly 700 DOD installations and National Guard locations where PFAS was used or may have been released and expects to have completed all initial assessments by the end of 2023.
Now more than ever is a good time to review your insurance policies to make sure you are protected. Be prepared for additional underwriting scrutiny as insurance carriers prepare themselves for the unknown about the potential of increased pollution related liability lawsuits.
For more information on environmental risk management solutions, contact INSURICA today.
Sources: EPA, Environmental Risk Professionals, whitehouse.gov
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