Insurance warning for companies over ‘forever chemicals’ liabilities

Insurers have begun introducing policy exclusions for per- and polyfluoroalkyl substances due to the ‘uncertain impact’ they represent, industry body the International Underwriting Association (IUA) recently said in a report.

PFAS are a class of around 10,000 fluorinated chemicals which occur in a variety of products, from healthcare to packaging and cleaning materials.

Different chemicals have different purposes – such as making products resistant to oil, water, or heat – and are known to degrade very slowly, leading to the ‘forever chemicals’ tag.

The IUA report underlines growing concerns over the liabilities risks facing companies who have used PFAS in production or manufacturing products that contain them.

Katie Hancock, an expert in environmental litigation at Pinsent Masons, said the shifting regulatory nature around PFAS left many companies which thought they had followed the rules in good faith facing an uncertain future.

“The uncertainty surrounding PFAS risk and potential liability, accompanied by a fragmented and confusing regulatory picture, presents a complex challenge for industry,” she warned.

“Many manufacturers and users of PFAS are operating in good faith, often within the bounds of existing regulation, yet now face potential exposure to evolving standards and retrospective scrutiny. As insurers grapple with how to quantify risk, businesses are left navigating a shifting landscape without clear guidance from regulators and government.”

“Regulation of PFAS in the UK is limited compared with some other jurisdictions, but that looks likely to change in the coming years.”

“Manufacturers and users of PFAS will hope that any new regulation is introduced in consultation with industry and taking into account the regulatory position in other jurisdictions, particularly Europe, in an effort to ease the costs of compliance with a myriad of global regulatory approaches.”

Earlier this year a UK government committee launched an enquiry into the usage of PFAS and whether regulatory bodies were “equipped to monitor their impact”.