Per- and Polyfluoroalkyl Substances: Your comprehensive guide

Per- and Polyfluoroalkyl Substances )PFAS) and everything you need to know about them from expert opinions or Lawsuits about it

Per- and Polyfluoroalkyl Substances (PFAS) are a reason for worry due to their high persistence or their breakdown products and known or inferrable effects on human and environmental health. There is currently no comprehensive source of information on the numerous individual chemicals and their roles in various applications, even though there are thousands of distinct PFAS that are utilized in a variety of applications. Let's know more about PFAS by reading this thread.

Per- and Polyfluoroalkyl Substances

Per- and Polyfluoroalkyl Substances (PFAS), a diverse collection of man-made compounds used in a wide range of consumer and industrial items, create a new potential risk for insurers as U.S. regulatory activity changes and case outcomes suggest this is a problem that will be bigger in the future.

Since the 1940s, a collection of at least 4,700 synthetic compounds known as PFAS—short for Per- and Polyfluoroalkyl Substances —have been used in industrial production to make surfaces resistant to stains, water, and grease.

The two that have received the most attention are PFOA (also known as C8), which has been used for many years to manufacture Teflon non-stick, and PFOS, which is used to make Scotchgard water repellent.

PFAS are extremely persistent and build up over time in both people and animals as well as in the environment.

They have been discovered in the Arctic environment and its polar bears and open ocean seas. They may also be transported by air and water.

What PFAS health hazards are there?

Following the discovery of their hidden dangers, the Environmental Protection Agency pushed for the phase-out of the two most prominent PFAS substances in the United States: PFOA, the substance used to make Teflon, and PFOS, a component of 3M's Scotchgard. These and similarly related PFAS compounds have been linked in several studies to:

• Childhood immunity compromised
• Reproductive difficulties
• Pancreas, liver, renal, and testicular cancer.
• A little birth weight
• Higher cholesterol
• Hormonal disruption
• Children who gain weight and adults who are dieting

Because they include eight carbon atoms, PFOA, PFOS, and the related phased-out substances are referred to as "long chain" chemicals. The EPA and the Food and Drug Administration have irresponsibly permitted the introduction of a large number of "short chain" substitutes with six carbon atoms because these compounds have been phased out.

Expert opinions about Per- and Polyfluoroalkyl Substances

The views of a group of eminent experts on PFAS are as follows:

DuPont

Chemical corporations assert that their new structure makes them safer. GenX, a short-chain compound, does, however, produce malignant tumours in lab animals, according to DuPont.

A 2019 Auburn University study

According to a 2019 Auburn University study, short-chains may present even greater dangers than long-chains, supporting the emerging consensus among experts that the entire PFAS family is dangerous.

Max Dorfman, Research Writer, Triple-I

The fact that Per- and Polyfluoroalkyl Substances are so pervasive and have the potential to endanger people's lives, despite being there since the 1930s, is causing alarm. Because of their ability to withstand moisture and oil, they are utilised in a variety of products, including Teflon coatings, food packaging, and firefighting foam. Due to the fact that these characteristics frequently persist in the body and never fully degrade, they may also be harmful.

Although PFAS research is still inconclusive, it has been linked to thyroid disorders, pregnancy-induced hypertension, and cancer. Everyone's blood undoubtedly contains some PFAS due to their widespread use. Additionally, there is concern over their existence in water sources.

Cindy Wilk

According to Cindy Wilk, Global Environmental Liability Expert at Allianz Risk Consulting at AGCS, PFAS are water soluble and easily dissolve in soil.

They can be released into water supplies as a result of industrial accidents or firefighting incidents, putting local communities at risk, but PFAS can also move fast down groundwater channels to pollute places distant from their original source.

Lawsuits about Per- and Polyfluoroalkyl Substances

Plaintiffs' attorneys have for years targeted one wealthy company—E. I. du Pont de Nemours and Co.—in their lawsuits alleging that so-called forever chemicals, also known as PFAS, have harmed people's health and the environment.

However, as public knowledge of PFAS has grown over the past two years, there has been a fundamental change in the legal environment. According to a Bloomberg Law review of more than 6,400 PFAS-related cases filed in federal courts between July 2005 and March 2022, companies including 3M Co., Chemguard Inc., Kidde-Fenwal Inc., National Foam Inc., and Dynax Corp. are now being sued at about the same rate as DuPont.

It's likely that a corporation is being sued if PFAS were present in its completed product. The dangers were starkly stated by a federal judge presiding over hundreds of PFAS cases.

Judge Richard Gergel stated in a July 2019 case that "It doesn't take a genius to see that the defendants face an existential threat to their life if certain motions are denied."

According to the Bloomberg Law research, E.I. du Pont de Nemours has been identified as a defendant in over 6,100 PFAS litigation since 2005. However, no business may be in more legal trouble than 3M. According to the study, it was mentioned in more than three PFAS-related cases on average each day last year.

More than 15 pages of the company's most recent annual report were devoted to its legal risk from Per- and Polyfluoroalkyl Substances (PFAS.)

More common PFAS lawsuits:

Over the past 20 years, PFAS litigation has grown significantly, starting with a case brought against DuPont, the manufacturer of Teflon. After being accused of tainting the water at a factory in West Virginia, DuPont agreed to pay up to $235 million to monitor the health of over 70,000 individuals. Similar cases have followed in large numbers.

In 40 courts, almost 5,000 PFAS-related complaints have been made as of 2021, with 193 defendants from 82 different businesses.

The PFAS Action Act, which was enacted by the House in 2021, also put the Environmental Protection Agency (EPA) on the current route for creating new PFAS guidelines.

Although these organisations are not the source of PFAS, the legislation does not provide a liability exception for water-wastewater utilities, raising concerns that they would be the subject of civil lawsuits.

In what ways does PFAS impact the insurance sector?

As more government rules and limits are put into place and as more lawsuits reach the courts, insurance firms should anticipate to see an increase in the number of Per- and Polyfluoroalkyl Substances-related claims. While PFAS become more difficult to insure, insurance firms will still need to make the tough decision of how to effectively assess and position these forever chemical risks.

Financially, it's unclear how PFAS may affect the insurance sector, but if they truly are "the next asbestos," as some claim, the cost would be high. Without taking into account possible responsibility for businesses that utilised PFAS in the production of their products or for businesses that marketed or consumed items created with PFAS, the anticipated lawsuit expenses for chemical corporations alone are at least $2 billion.

According to Canaan Crouch, Managing Director of Jencap Specialty Insurance Services, Once these laws are spread, there will be a tsunami of litigation.

The suggested regulatory model has a toxicity level of about 70 parts per trillion. That is comparable to one drop of PFAS in an Olympic-sized swimming pool, to give you an idea.

How should insurers react?

Although the Insurance Services Office (ISO) has not yet created a business liability policy exclusion for PFAS, work is being done on one and it may be released in late 2022. Several PFAS-related exclusions, some as modifications to the Total Pollution Exclusion or by forming a stand-alone Per- and Polyfluoroalkyl Substances exclusion, are in circulation while that procedure is still in progress. However, given that the Biden Administration's regulatory focus on PFAS may result in more lawsuits, insurers must be cautious of the possible risks.

Reinsurer Gen Re advises insurers to:

• Make a list of the risks that have already been insured.
• Consider new risks thoroughly when submitting.
• Stay informed on PFAS, both in terms of scientific advancements and the lawsuits it causes.

How may PFAS affect an insured party?

Because PFAS are so widely used, businesses with even a passing link to these substances—chemical firms, manufacturers, merchants, etc.—could be held accountable for the damaging effects these substances have on human health and the environment. These businesses will carefully examine their current insurance plans and take every precaution to protect themselves from any potential legal action as regulators and courts begin paying more attention to PFAS and their long-term impacts.

Exclusions for pollution are common in general liability plans. A rising number of carriers are adding exclusions for PFAS as well, given its extensive effects. Depending on the carrier, environmental and pollution-specific policies may cover things like remediation and clean-up. To minimize expensive risks, some environmental carriers are even opting to expressly exclude PFAS from policies, which makes it more challenging for businesses to acquire adequate coverage.

To assist customers in considering their alternatives, carriers will need to evaluate policies on a case-by-case basis. Exclusions may sometimes be inevitable, depending on the risk, but cost-cap plans that include pollutants are still a possibility, provided certain conditions are satisfied.