Author: Katrina Seese, Jessica Plummer, Alliant
Establishing allowable concentrations and regulations for PFA’s has opened the door to lawsuits between the companies who have been involved in the production of PFAS, and the government, water suppliers and customers who are drinking them. More than 6,400 PFAS-related lawsuits were filed since 2005. Many of those were against Corporations including DuPont, 3M Co., Chemguard Inc., Kidde-Fenwal Inc., National Foam Inc. and Dynax Corp. A related issue raised by these lawsuits is aqueous film forming foam (AFFF), a product 3M and the Navy created to fight fires that has been required at military bases and airports for decades and used extensively in both emergency fires and training exercises. According to a Bloomberg Law analysis, these firefighting foams are now the source of so much PFAS litigation that a special body within the federal judiciary consolidated thousands of cases into a single docket called a multidistrict litigation (AFFF MDL). At least 1,200 PFAS lawsuits filed in 2021 ended up in the AFFF MDL.
Rulings expected later this year will be key in determining which parties will have the upper hand and who will fund billions in remediation costs—the manufacturers of the PFAS or the states, water districts and taxpayers.
Availability of Insurance
Pollution liability policies are a risk management tool for property owners and site pollution policies provide coverage for clean-up of unknown pollution conditions, third-party bodily injury and property damage and legal defense expense associated with covered claims. The proposed rule and the extent of contamination and estimated high costs to remediate the nation’s drinking water has led carriers to become increasingly hesitant to provide coverage for PFAS in these policies. Over the past three years many have responded by implementing broad PFAS exclusions, however coverage may still be available for properties where PFAS use is contingent or where extensive Phase I and Phase II soil and groundwater testing has been conducted to affirm no existing contamination. One environmental insurance carrier has instituted a PFAS questionnaire as part of their underwriting process to more comprehensively evaluated this exposure, and if all questions fundamentally verify no historic or current use of PFAS or current contamination (from onsite usage or offsite migration), the exclusion can be removed. While subsurface evaluation is recommended to obtain the best coverage, testing can also trigger reporting requirements to regulatory agencies which can then require costly remediation, making this a tricky decision (which should only be done in consultation and coordination with legal, engineering and risk management team).
Ultimately concerned entities should review each situation with an environmental consultant and an insurance broker with extensive expertise in the highly specialized and dynamic site pollution liability marketplace to determine the best course of action.