Have you seen the 2019 film “Dark Waters”? Starring Mark Ruffalo, Anne Hathaway and other Hollywood A-listers, the movie is based on the true story of an attorney’s 15-year fight for justice for the people of a small West Virginia town who for years were unknowingly exposed to toxic “forever chemicals” by a large manufacturing company. Sustained exposure to PFAS caused hundreds of farm animals to die of unusual illnesses and led to a range of human health issues. (After a long and arduous legal battle, the company settled a class action with impacted families for more than $670 million.)
The story depicted in the film is regrettably not an isolated incident. There is real concern that the ubiquity of forever chemicals in our environment could lead to unprecedented insurance exposures and detrimental effects on the health of animals, humans and planet Earth. Some are asking whether forever chemicals might be the “new asbestos.” Our industry colleagues at Out Front Ideas (including Sedgwick’s own Kimberly George) included forever chemicals in their list of 20 insurance topics to watch in 2023, and I agree we must keep an eye on this important issue.
Definitions and dangers
The proper scientific name for this category of chemicals is per- and poly-fluoroalkyl substances, or PFAS/PFOS. These man-made chemicals have been widely used since the 1940s in the manufacturing of industrial and consumer products. Thanks to PFAS’s ability to stand up to oil, heat and water, they’re particularly useful for items like non-stick cookware, waterproof products, stain-resistant carpeting and firefighting foams. (Readers from the UK are likely familiar with the use of such foams in extinguishing the famous Buncefield fire in 2005; PFAS were later discovered in the area’s groundwater.)
The resistant qualities that make these chemicals so effective are the same ones that make them so hazardous. Their chemical bonds are among the strongest in organic chemistry, so they are extremely long-lasting and difficult to break down (thus the “forever chemicals” moniker). They’re also very mobile. Equally challenging is separating PFAS from water or land they have contaminated. Soil, for example, must be heated to about 350 degrees Celsius (more than 660 F) to remove PFAS — making decontamination complicated, cumbersome and very costly.
Rather than biodegrade, forever chemicals bioaccumulate. When PFAS make their way into living organisms, they become concentrated and ever more dangerous. As was the case in the “Dark Waters” story, the primary way people are exposed to PFAS is by drinking contaminated water. Others include eating fish from contaminated waters or food grown or raised near PFAS, swallowing bits of contaminated soil or dust, or using consumer products that include PFAS. According to the Centers for Disease Control and Prevention (CDC), research suggests that PFAS exposure from today’s consumer products is generally low. Workers involved in making or processing materials containing PFAS are more likely to be exposed — whether by inhaling them, getting them on their skin, or swallowing them.
Because these chemicals are relatively new, there is limited data about their long-term effects on humans. Research has shown that PFAS in the bloodstream can (but does not necessarily) lead to health issues. These can include cancer (primarily kidney and testicular), liver problems, thyroid issues, increased cholesterol levels, birth defects and fertility issues. Keep in mind that one CDC study estimates forever chemicals can be detected in the blood of nearly 97% of Americans, and most do not have these health conditions.
Anticipated impact and ongoing developments
With regard to forever chemicals’ effect on insurance, I suspect we’ve only seen the tip of the iceberg. Granted I am not an environmental scientist, but in my nearly 40 years of adjusting experience in the UK, including 18 focused solely on environmental-based claims, I recall only a handful of losses involving PFAS-related liabilities. Litigation of these claims is just now beginning. There is certainly potential for added product liability risk for manufacturers and distributors of items that reach or exceed safe standards for forever chemicals.
In the realm of environmental underwriting, things could get more complicated. When they began writing these specialist policies, many underwriters did not foresee the need to include forever chemicals in their risk assessment process. Now that the potential issues have come to light, some are building exclusions into their policies.
The international regulation of PFAS, particularly in drinking water, plays an important role in defining the safety threshold. In parts of the world like Scandinavia, where water often comes from bore holes, they are extremely sensitive to contamination levels and demand the highest standards of clean-up after a pollution event. Other countries (including the UK and U.S.) generally adopt a more risk-based approach while ensuring that citizens’ well-being is protected. That said, the U.S. Environmental Protection Agency (EPA) earlier this year proposed new national standards for six types of PFAS in drinking water. Regulators across the world continue to evaluate the risks and adjust the standards in their respective jurisdictions as they balance the protection of human welfare and economic interests.
To avoid sounding all doom and gloom, it’s important to highlight some of the exciting scientific developments emerging from those seeking to tame the risks of forever chemicals. Among others, teams of university researchers recently announced new advances in breaking down PFAS compounds and efficiently removing them from drinking water.
Taking caution
PFAS is present at low levels in the environment and many of the foods we eat, so it’s unlikely people can completely avoid exposure. To reduce the risks to you and your family:
- Be mindful of your food choices, and take notice of what’s in the products you use.
- Carefully follow the guidance of local health or environmental quality departments regarding the safety of area drinking water, agricultural products, and fishing and hunting.
- Stop using cookware with scratched or dented non-stick surfaces (especially those manufactured before 2015).
At an organizational level, private and public entities should carefully consider their use of materials that include forever chemicals and explore whether more biodegradable alternatives are viable. These undertakings should be aligned with overall environmental, social and governance (ESG) efforts. Further, risk managers are advised to keep track of all insurance policies that could be relevant, should litigation related to a PFAS claim arise.
As with any emerging risk or contaminant, it’s important to strike an appropriate balance between concern and being alarmist. While we don’t yet know the true scale of this issue, it’s likely we’ll be facing the hazards of forever chemicals for quite some time. Thus, we must stay on top of the risks and be as proactive as we can in addressing them.
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