Perfluoroalkyl and polyfluoroalkyl substances, commonly referred to as PFAS, consist of a large grouping of over 7,000 chemicals that have been widely manufactured and distributed across the United States since the 1940s. Because PFAS don’t break down easily within the environment or the human body, these substances are also known as “forever chemicals.” PFAS can be found in various products, including food packaging, nonstick cookware, household cleaners, firefighting agents, textiles, furniture and auto parts.
Over the past few years, PFAS have been the subject of increased litigation and regulation. Such scrutiny stems from recent developments regarding the health and safety concerns of these substances, as well as their environmental impact. Namely, PFAS have been linked to several health conditions, including certain cancers and immune dysfunction. Amid this scrutiny, businesses that manufacture PFAS, sell products containing these substances or utilize packaging with PFAS may face elevated liability exposures.
Overview of PFAS
PFAS refer to a wide range of synthetic substances that have been leveraged for commercial use throughout the last several decades. The chemical properties of PFAS—primarily, their ability to make materials resistant to fire, stains and water—have allowed them to be utilized in a number of products across industry lines. For example, PFAS may be found within carpeting that can resist stains or pipes and wires that can limit corrosion. Despite the benefits associated with these substances, PFAS also come with consequences.
In particular, the Environmental Protection Agency (EPA) has conducted extensive research on two types of PFAS over the years, identifying them as contributors to certain health issues and pollution problems. These PFAS—known as perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS)—have been linked to the following conditions:
- Several types of cancer (e.g., prostate, kidney and testicular)
- Reproductive concerns (e.g., fertility problems and high blood pressure among pregnant women)
- Developmental delays in children (e.g., low birth weight and bone variations)
- High cholesterol and obesity
- Immune dysfunction (e.g., reduced vaccine response and decreased ability to fight off infections)
According to the EPA, individuals may be exposed to PFAS in numerous ways, such as by using products containing these substances, coming in contact with packaging that includes PFAS, drinking contaminated water or food, breathing in contaminated air, swallowing contaminated soil or dust, and working in an industry involving the use of these substances (e.g., firefighting or chemical manufacturing).
PFAS don’t degrade very easily and often bioaccumulate or become heavily concentrated in people and the environment over time, thus exacerbating exposure concerns. In fact, data from the National Health and Nutrition Examination Survey estimated that these substances could be found in the blood of 98% of the human population. As more information regarding the risks of PFAS comes to light, increased litigation and regulatory issues involving these substances have ensued.
Litigation and Regulatory Concerns
In response to the EPA’s research on PFAS, these substances have been the subject of greater legal scrutiny at both the federal and state levels. Although PFOA and PFOS have already faced regulatory action—resulting in these substances no longer being manufactured in the United States since 2015 and 2002, respectively—the federal government recently announced plans to further expand PFAS legislation.
Such efforts include:
- Creating national drinking water standards and water quality criteria related to PFAS contamination
- Designating PFOA and PFOS as hazardous substances, as well as asking for public opinion on whether additional PFAS should be deemed hazardous
- Establishing a foundation to designate specific PFAS as hazardous air pollutants in the near future under the Clean Air Act
- Enhancing PFAS reporting requirements under the Toxic Substances Control Act
- Conducting and publishing toxicity assessments for various PFAS
- Limiting PFAS discharge from industrial sources and increasing discharge monitoring
- Engaging in research initiatives and investing in technology related to assessing and reducing PFAS exposures within the environment
Altogether, these regulatory efforts have the potential to place additional compliance requirements and liability exposures on businesses that either develop or depend on PFAS in their operations, such as chemical manufacturers that produce these substances or retailers that utilize packaging consisting of PFAS. Some businesses have already adjusted their policies and procedures to prepare for federal PFAS legislation. For example, fast food companies McDonald’s and Wendy’s have both announced plans to phase PFAS out of their meal packaging.
Apart from federal legislation, several states have established PFAS regulations of their own in recent years. Currently, 15 states have standards restricting PFAS contamination within soil and groundwater. Furthermore, New York and New Jersey have already listed PFAS as hazardous substances within their regulatory regimes. This state-specific legislation has contributed to a rise in litigation and subsequent liability concerns for businesses that are found responsible for causing PFAS contamination. For instance, multiple manufacturers have faced lawsuits due to their operations resulting in contaminated soil or drinking water and allegedly leading to health complications for individuals located near their worksites.
Although recent PFAS litigation has been directed primarily at manufacturers, it’s certainly possible that businesses across additional industries could encounter lawsuits related to the use of these substances in their products and packaging, especially as a growing number of states adopt and enforce PFAS standards.
Insurance Considerations
As businesses are being held increasingly responsible for PFAS contamination through regulatory action and litigation, it’s important they take steps to minimize liability exposures—namely, limiting overall PFAS utilization, investing in alternatives, and ensuring compliance with applicable legislation. In addition, it’s critical for businesses to secure adequate insurance to protect against potential PFAS-related liability incidents.
Primarily, businesses should review both their existing and prior insurance policies to determine whether they provide sufficient coverage for PFAS-related incidents. Keep in mind that many insurance policies exclude coverage for incidents involving environmental pollutants or hazardous substances. As such, these exclusions may apply to PFAS, depending on specific circumstances and policy wording.
Considering these exclusions, some businesses (based on their particular liability exposures) may want to purchase specialized coverage for PFAS-related incidents, such as pollution liability insurance. Regardless, businesses should consult trusted insurance professionals to secure proper coverage.
Clearly, PFAS have become a growing concern in recent years, posing health and safety issues and environmental threats. With businesses of varying sectors facing elevated PFAS-related liability exposures due to increased legal scrutiny, implementing effective risk mitigation techniques and purchasing proper coverage are now all the more vital.
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