Introduction
Perfluoroalkyl and polyfluoroalkyl substances (PFAS), often referred to as “forever chemicals,” are synthetic chemicals found in various industrial and consumer products. Their persistence in the environment raises significant concerns.
PFAS are used in industries such as automotive, aviation, defense, and construction, as well as in household items like cosmetics, cleaning products, food packaging, and non-stick cookware. They do not naturally degrade, leading to environmental and health issues.
The UK Environment Agency discovered PFAS in 96% of surface water samples, underscoring contamination problems. Exposure to PFAS is linked to health issues like cancers, high cholesterol, and thyroid disease, prompting legal and political debates on regulation to balance harm mitigation with industrial impact.
UK commercial context
PFAS contamination has become a focal point in the UK due to media coverage and enhanced testing.
A report by Jacobs UK Ltd for the Environment Agency estimates between 2,900 and 10,200 high-risk PFAS sites in England, with remediation costs potentially reaching £121bn.
Industries such as automotive, electronics, and cosmetics are identified as “presumed PFAS” sources, facing potential regulation and liability. The full report offers detailed insights into the PFAS situation in the UK.
Current regulatory regime
PFAS are regulated under UK REACH, with 36 PFAS registered as of April 2023. The Health & Safety Executive expects more registrations. Regulatory priorities include assessing PFAS as a “substance of very high concern,” preparing a restriction dossier on PFAS in firefighting foams, and evaluating further restrictions on PFAS uses.
The Stockholm Convention, implemented in the UK by the UK Persistent Organic Pollutants’ Regulation, bans certain substances and restricts others. The UK government plans to remove specific exemptions for perfluorooctanoic acid and perfluorooctane sulfonic acid (PFOS).
Additional statutes may further limit PFAS production and use, including regulations on hazardous substances, food contact materials, and water quality. DEFRA’s PFAS Chemicals Stakeholders Forum is developing policy, with non-governmental organisation’s advocating for a comprehensive PFAS action plan.
Litigation lens
The US has seen extensive PFAS-related litigation, with settlements amounting to billions of dollars.
Cases target manufacturers, distributors, and secondary defendants like waste management centres. Internationally, Australia settled a class action for PFAS contamination, and European countries are pursuing legal actions.
In the UK, recent Supreme Court decisions on environmental contamination suggest potential for future PFAS litigation.
Managing PFAS risks for landowners and developers
To mitigate PFAS risks, landowners and developers should:
- Conduct initial site reviews to identify and prioritise risks.
- Develop management plans for sites with PFAS materials.
- Investigate PFAS presence early in development or purchase processes.
- Evaluate costs of treating or removing PFAS-contaminated materials.
- Stay updated with guidance from sources like the Environment Agency.
- Engage with regulators early in the development process.
- Consult insurers about PFAS risk coverage.
Insurance cover for PFAS/PFOS
Insurance companies are increasingly incorporating PFAS-specific exclusions in policies, particularly general liability policies, which exclude coverage for PFAS-related bodily injury and property damage.
Environmental impairment liability policies vary, with some UK insurers excluding PFAS cover, while others assess it on a site-specific basis.
Support from Gallagher
Gallagher’s specialist team can audit your risk assessments to help protect your business and people.
For more information on how Gallagher can assist your organisation or discuss your insurance needs, please contact our team.
