Manufacturers Face Increased PFAS Liability

Manufacturers Face Increased PFAS Liability

New rules on PFAS pollution are coming to the U.S. With government agencies and environmental watchdogs focusing on the dangers of forever chemicals, manufacturing companies are facing increased PFAS liability.

Alarm Over Forever Chemicals

Per- and polyfluoroalkyl substances (also known as PFAS or forever chemicals) are a class of pollutants. According to the U.S. Environmental Protection Agency (EPA), PFAS are widely used chemicals that break down very slowly. PFAS have been found in water, air, fish, soil, and even human blood. This has led to concerns because scientific studies have linked exposure to PFAS with harmful health effects.

The Agency for Toxic Substances and Disease Registry (ATSDR) says more research is being done to understand PFAS toxicity. There is already evidence to suggest that PFAS exposure may:

  • Increase cholesterol level
  • Cause changes in liver enzymes
  • Reduce birth weights
  • Lower antibody response to certain vaccines
  • Contribute to pregnancy-induced hypertension and preeclampsia
  • Contribute to kidney and testicular cancer

The New Drinking Water Standard

On April 10, 2024, the first national drinking water standard to limit PFAS exposure was finalized.

Under the new standard, public drinking water systems will have three years to complete an initial test for PFAS chemicals. These PFAS levels will be announced to the public. If PFAS levels exceed the amount allowed under the standard, public drinking water systems will need to implement solutions within five years. The EPA has estimated that up to 10% of public drinking water systems subject to the new rule may need to take action to reduce PFAS to meet the new standard.

In addition to the new federal standard, many drinking water systems have to comply with new state rules. According to Safer States, 11 states have introduced standards for PFAS in drinking water so far.

Increasing PFAS Litigation

While public water systems deal with new standards, the companies that produce PFAS pollution are facing litigation. Experts have warned that the number of lawsuits may increase. Although the EPA has announced $1 billion in new funding to help with water testing and treatment, some states and cities have been targeting manufacturers to cover the costs.

Implementing controls to remove PFAS from public water supplies is expensive. According to Wisconsin Public Radio (WPR), the city of Wausau has unveiled an upgraded filtration system that will cost $800,000 a year to maintain – and the city thinks manufacturers should be responsible for the costs. Wausau has filed a lawsuit against 15 manufacturers, but it’s just one of several cities to file lawsuits recently.

State-level lawsuits have also been on the rise. Safer States says 30 state Attorneys General have initiated PFAS litigation, as of April 16, 2024. These lawsuits target PFAS manufacturers accused of contaminating the environment. Whereas many cases are ongoing, at least four states have already reached settlements. For instance, New Jersey has proposed a settlement with Solvay for $393 million.

Perhaps the highest-profile case so far has been against manufacturer 3M. According to AP News, 3M will begin making payments in 2024 to various U.S. public drinking water systems as part of a settlement that is expected to reach between $10.5 billion and $12.5 billion, depending on additional contamination findings.

A Long and Complex Process

Successful PFAS lawsuits may result in multimillion or even multibillion settlements, but the cases tend to be lengthy and complex. According to WPR, PFAS litigation often involves untested legal theories. Pinpointing the source of pollution is also challenging, which often leads manufacturers to argue that other companies are to blame for the forever chemicals in water supplies.

Despite these complexities, it’s clear that PFAS lawsuits are the new reality. Time warns that PFAS lawsuits have the potential to eclipse the famous big tobacco settlement, which required tobacco companies to pay states $206 billion in damages.

For manufacturers that use PFAS, this is a frightening possibility. Do you have the insurance coverage you need to help manage your environmental risks?

Founded in 1961, Wilson, Washburn & Forster recently joined Alera Group – the nation’s 14th largest independent insurance agency. As part of this national firm, we can provide our clients with even more resources, technical expertise, and best practices, while maintaining the local service, claims handling, and community commitment Florida businesses expect.

Contact us today at 786-454-8384 for a complimentary analysis of your insurance and risk management program by an insurance specialist in the environmental liability field.

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