Per- and polyfluoroalkyl substances (PFAS) may no longer be “new and scary” for insurers, but they remain one of the most consequential long-tail risks in the environmental liability market.
Sometimes called “forever chemicals” because they do not readily break down in the environment, PFAS is tied to a growing wave of litigation, regulatory action, and heightened scrutiny of corporate practices across sectors.
According to Jared Dubrowsky (pictured), environmental transaction leader at Howden US, PFAS has evolved from an obscure chemical acronym to a central concern in US environmental risk.
“PFAS is going to be an issue for the foreseeable future. I don't think that's going to change anytime soon,” he said. “What’s really starting to happen is that the insurance markets are starting to feel a little bit more comfortable with everything that's happening.”
This time last year, Dubrowsky said, more carriers were outright excluding PFAS from their policies.
“Now I'd say the number of carriers that are outright excluding PFAS is maybe a handful, a small handful at that,” he told Insurance Business. “It has just gotten much better. They're willing to underwrite the exposure, whereas this time last year nobody was going to underwrite it.”
The crucial distinction is between GL policies and standalone environmental coverage.
On the dedicated site pollution and contractors’ pollution liability side, Dubrowsky is not seeing “hard no’s” on PFAS. Instead, most carriers will entertain coverage for bodily injury (BI) and property damage (PD), typically focused on defense costs rather than cleanup.
On the GL side, it’s a very different story.
“Pretty much every GL policy has a PFAS exclusion now,” Dubrowsky said. But brokers and clients need to understand what has really changed and what hasn’t.
GL policies began excluding pollution in the mid-1980s. PFAS, as a pollutant, was already outside the GL grant of coverage in most modern forms. The new, explicit PFAS exclusions are less a substantive change and more a wake-up call.
Dubrowsky explained: “What the exclusion has done is bring that absolute pollution exclusion within the GL policy to the forefront again. You're having clients now come back and say, ‘Well, wait a second, what is this exclusion? Do I need to be concerned about this?”
This awareness is driving new demand for environmental insurance – and opportunity for brokers. As carriers become more comfortable underwriting this risk, brokers are being pushed into a more advisory, forensic role. This includes mapping clients’ historical operations, anticipating shifting regulation, and even mining pre-1980s general liability (GL) policies to plug legacy coverage gaps.
Brokers should not assume that PFAS remediation is readily insurable on standalone environmental policies… at least not yet.
Dubrowsky expects PFAS exclusions to be “the new normal” on GL policies, but anticipates at least limited PFAS coverage to remain available on site pollution and contractor pollution forms. The sticking point is cleanup.
A lot of that has to do with the fact that the US federal government has not issued a federal soil cleanup criteria for PFAS. Instead, carriers are navigating a fragmented patchwork of state standards layered on top of US EPA regulation. The regulatory uncertainty makes it difficult for insurers to price and reserve for remediation.
“Until the EPA can come out and say, ‘Here's the federal cleanup criteria,’ I don't think you're going to have carriers openly willing to cover PFAS remediation if they know it’s there,” Dubrowsky said.
By contrast, BI/PD coverage, especially for defense, is more palatable. With PFAS so ubiquitous in consumer products and the environment, causation is extremely hard to pin on a single facility or product.
“Claims for bodily injury and property damage… most carriers are willing to give you coverage for that, because they know it's largely going to be a defense claim,” Dubrowsky said. “It's really hard to say that you got PFAS from one specific source when its use is ubiquitous… So, it's going to end up being just a defense issue.”
With PFAS exclusions standardizing on GL and a more nuanced approach emerging on environmental, brokers have to elevate their technical and investigative game. Today’s business model may bear little resemblance to historic operations that created PFAS exposures.
“As a broker, you have to understand what your client does and what they have always done,” Dubrowsky stressed. He pointed to manufacturers that have since become importers and distributors: “Twenty or 30 years ago, when grandpa started the business, that factory may have used PFAS.”
Brokers also need to look forward, helping clients anticipate where PFAS regulation is heading, not just where it stands today. At the same time, it means structuring environmental programs with future scenarios in mind, particularly for sectors with heavy chemical use, manufacturing footprints, or substantial real estate.
One of the most practical and often overlooked tools in the PFAS risk arsenal is the client’s own insurance history.
“For legacy PFAS coverage, one of the things I've been doing is really encouraging my clients to dig down,” Dubrowsky said. “How long have you been operating for? How long has this company or its parent company been in operation?”
The key date: the mid-1980s, when pollution exclusions became standard in GL policies. Prior to this period, there was no pollution exclusion, meaning older policies may not cover contamination that surfaces today, including PFAS-related liabilities.
“We are finding clients who can go back on those old GL policies and recover some money,” said Dubrowsky. “That's one of the first things I do with clients who say, ‘We may have this issue…’ More often than not, there is some coverage there. It's just a matter of finding it.”
