PFAS Litigation: A Growing Risk for Insurers

During a recent panel discussion at The Insurer TV's Reinsurance Month, experts raised concerns about the increasing litigation risks surrounding PFAS, or "forever chemicals."

Published on September 24, 2024

PFAs
PFAS Contamination - Alertness about dangerous PFAS per-and polyfluoroalkyl substances into the sea waters - They are now everywhere, so much so that they have even been found in marine aerosol - Concept with magnifying glass

During a recent panel discussion at The Insurer TV’s Reinsurance Month, experts raised concerns about the increasing litigation risks surrounding PFAS, or “forever chemicals.” These chemicals, commonly used in consumer products, are linked to severe health issues and could result in $80 billion in U.S. litigation costs. Panelists emphasized the need for insurers and reinsurers to address this emerging liability.

Insights from Industry Experts

Panelists noted that PFAS litigation could parallel previous asbestos claims, calling for more sophisticated risk modeling to evaluate the full scope of exposure. They highlighted the importance of developing casualty risk models, much like the early property catastrophe models, to help insurers navigate this long-tail risk. The potential liabilities could have a far-reaching impact on both primary insurers and reinsurers.

Preparing for a Surge in Claims

With PFAS litigation expanding across the U.S., insurers must take proactive steps to mitigate exposure. Industry leaders recommend revisiting policy language, ensuring that exclusions and terms address the evolving risk landscape. Reinsurers, in particular, are urged to adjust their risk models to anticipate the financial strain posed by this new wave of litigation.

As insurers face increasing legal claims related to PFAS contamination, the industry must remain vigilant and adapt to manage the potentially massive liabilities ahead.

For more insights, visit The Insurer TV.