PFAS – Lingering ‘Lawfare’ Liabilities

Heard much about PFAS lately? Neither have we. But that doesn’t mean your risk of environmental liability costs has gone away. What’s more, if federal or state authorities cite you for PFAS contamination in wastewater effluent, insurance probably won’t cover it. That’s the upshot of a May article in Textile Services on the future of enforcement for per- and polyfluoroalkyl substances (aka PFAS).

The article, titled “Is PFAS the Next Asbestos?” argues that insurance companies want no part in compensating companies cited for pollution involving these so-called “forever chemicals” that don’t break down in nature and are considered hazardous to human health, even in minute quantities. “The insurance industry has moved quickly to limit its exposure to PFAS-related claims,” writes Michael Rayo, a risk management specialist for Haylor, Freyer & Coon, an Alera Group Co. “A key turning point emerged in June 2023 when the Insurance Services Office introduced standardized PFAS-exclusion endorsements across multiple lines of coverage, including Commercial General Liability, umbrella and excess liability and Business Owners Policies. These endorsements have become standard across most carriers, with many using ISO forms or developing their own proprietary exclusion forms. As a result, PFAS exclusions are now nearly universal across liability policies.”

Meanwhile, the risk of PFAS liability is real. In April 2024, the EPA classified two forms of PFAS, PFOA and PFOS, as hazardous materials under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), also known as Superfund. While regulators under President Donald Trump’s administration and in various states, such as Michigan, generally haven’t pursued aggressive enforcement of PFAS contamination in recent months, that could change at any time.

Developed and in use since the 1940s, PFAS compounds are used in a variety of products, including isolation gowns and flame- and stain-resistant workwear. This family of chemicals was created to help products such as non-stick cookware and textile goods resist heat, water, oil, grease, stains and chemical reactions.

While laundry operators don’t use PFAS directly, PFAS is sometimes present in laundry chemicals or in the garments they provide to hospitals and other customers. It then enters wastewater effluent after washing. “Commercial laundries routinely process textiles treated with PFAS-based coatings, including stain-resistant uniforms, water-resistant garments, industrial fabrics and hospitality and healthcare linens,” Rayo writes. “During standard washing and finishing processes, PFAS compounds can leach into wastewater systems, accumulate in filtration systems or sludge, and ultimately enter municipal water-treatment systems. Over time, this can create environmental concerns. This exposure is neither isolated nor hypothetical. It is inherent to the day-to-day operations of many laundry facilities.”

Operators can protect themselves from enforcement actions and “lawfare” directed at them by product liability attorneys by moving to ensure that PFAS isn’t present in their wastewater, says Rayo. “Commercial laundry operators can take several practical steps to reduce their exposure,” he writes. “Evaluating chemical inputs and working with suppliers to determine the potential presence of PFAS compounds is an important starting point. Where feasible, transitioning to PFAS-free alternatives can help reduce long-term liability.”

Working with your insurance company or broker to further protect your company is also necessary, he writes. “Reviewing existing insurance policies to identify exclusions and gaps is critical, as is exploring specialized coverage options where available. Operational improvements, such as enhanced spill-containment systems and wastewater controls, can also mitigate risk.”

Click here for a sneak peek at the May article. Click here to subscribe to Textile Services.