A growing risk for specific Australian businesses has emerged: injury or environmental damage as a result of substances commonly used by their industry sector. In many cases these materials have been part of business operations for years.
Per- and polyfluoroalkyl substances (PFAS), known as forever chemicals, and microplastics are an emerging liability challenge due to the difficulty of breaking them down and their negative health impacts — and they are prevalent in certain industries.
Scientific research links microplastic exposure to various types of bodily injury and has also shown that microplastics can expose us to other toxic chemicals, including bisphenols, phthalates and PFAS.
Since the 1950s more than 14,000 human-made PFAS have been used in firefighting foams, insecticides, food packaging, non-stick frypans, clothing, cosmetics and more — with qualities of high heat tolerance and ability to repel water and oil1 they're also used in production processes.
Industries with high PFAS exposures include:
- fire services: firefighting foams contaminate surrounding areas and are a primary source of PFAS pollution
- defence and airports: similarly to fire services, military and airport sites have used PFAS-containing firefighting foams
- mining and fuel: mining operations and fuel storage facilities have used PFAS in various industrial processes
- waste management: landfill operations and the recycling of contaminated materials can concentrate PFAS into new products like textiles and plastics2.
Industries with high microplastic exposures include:
- automotive: tyre wear is a major source of microplastic pollution, with increased concentrations in areas with heavy vehicle traffic
- sports fields and exterior landscaping for corporate properties: synthetic turf fields and the use of rubber crumb infill are significant sources of microplastics
- agricultural and other commercial plantings: potting mixes and other growth substrates for cultivating plants have been found to contain high levels of microplastics
- waste management: like PFAS, waste management facilities can spread microplastics, particularly through processed organic waste
- manufacturing: industries involved in the production and use of plastic materials are a direct source of microplastics3.
Regulatory requirements around the use of PFAS in industry
With the aim of phasing out their use some types of PFAS, including PFOS, PFOA and PFHxS, have been classified and listed on Schedule 7 of the Industrial Chemical Environmental Management Standard (IChEMS) register. The requirement to stop using these listed substances came into effect 1 July 2025.
IChEMS is a national set of regulations managing chemical use, storage, handling and disposal. Schedule 7 includes the chemicals of greatest concern, described as 'likely to cause serious or irreversible harm to the environment'4.
In addition to halting the use of the most dangerous PFAS, increasing public and regulatory focus on potentially harmful or polluting substances means that businesses must be prepared to implement detailed risk management protocols for handling them.
Steps businesses can take to improve risks in the use dangerous substances
The following strategies may help businesses demonstrate risk management of dangerous substances, to support insurances sought. Data-driven differentiation of PFAS and microplastics risks, and how they are to be handled are key to navigating the complexities involved.
Documented plans detailing safety measures and protocols
Chemical containment measures should be appropriate to the business's operational risk. These should be regularly reviewed, updated and tested to ensure they remain effective.
Employment contractual terms and conditions
Agreements with contractors and subcontractors should include the relevant workers' compensation cover.
Ensure coverage is adequate for the exposures
Assess pollution exposures and consider environmental impairment liability (EIL) policies for more comprehensive coverage.
Proactive PFAS management
Disclose details of the use of PFAS as well as their associated risks to clients and consider additional insurance coverage options. Staying up to date with regulations governing the use of potentially harmful materials enables businesses to plan proactively.
Implications of harmful substances for business insurance coverage
With the identification of these health and pollution threats liability insurance terms are increasingly excluding PFAS, especially for high risk industries and, similarly to asbestos exclusions, are likely to become universal.
Businesses will need to carefully examine the terms offered by public and products liability for risk management.
Standard liability insurance policies provide limited coverage for pollution, which is applicable only if the contamination is unexpected and occurs in a sudden incident that occurs at a specific time and place, as opposed to gradually over an extended period.
For more comprehensive coverage businesses may consider adding environmental impairment liability insurance. With this coverage it's critical to understand the difference between the business's and third party's losses5.
Get expert advice for complex potential forever chemicals exposure liability insurance
It's critical to consider obtaining the right liability coverage and terms to make sure your business has the protection it needs, which may go beyond what's covered in standard policies. It's important to find cover that can be customised to suit your operations.
Our insurance brokers have the expertise and experience to obtain the insurance cover you need.
