Gallagher Global Open

    October 2023

    Executive summary

    The United States Environmental Protection Agency (EPA) has identified per- and polyfluoroalkyl substances (PFAS) as one of the most significant emerging contaminants of concern.

    In June, chemical and manufacturing giant 3M and a broad coalition of US cities and towns reached a landmark, nuclear USD12.5 billion verdict relating to the company's use of PFAS — also known as "forever chemicals" — over several decades.

    PFAS are a group of over 12,000 chemicals used in industry and consumer products around the world in everything from shampoo and carpeting to food wrappers and cookware.

    As a result of PFAS long-lasting nature and resistance to degradation, their use has resulted in extensive environmental contamination, leading to growing regulatory scrutiny and legal liabilities.

    This article explores the concerns associated with PFAS contamination and the implications for Casualty and Environmental insurance. Growing concerns and new rules have triggered a surge in claims and heightened demand for coverage.

    Organizations with PFAS-related liabilities within their business or supply chain need to transition away from their use, regardless of what insurance protection is in place.


    • PFAS — or 'forever chemicals' — have quietly permeated our lives, resulting in extensive environmental contamination, prompting growing regulatory scrutiny and potential legal liabilities that could stretch back decades.
    • In June, chemical giant 3M agreed to pay up to USD12.5 billion to settle a lawsuit brought by a broad coalition of US cities and towns in what has been described as "The largest drinking water settlement in American history".
    • While PFAS litigation is still unfolding, it could prove to be bigger than the 1998 Tobacco Master Settlement. Time will tell.
    • Due to the widespread use of PFAS and their persistence in the environment, the chemicals have been found in soil, drinking water, lakes, oceans, the air, rainwater, food, fish, animals and humans. Studies have linked PFAS exposure to a high number of adverse health effects.
    • Historical General Liability policies may respond to claims if the contamination occurred pre-1985, during a policy period in which the coverage did not exclude "sudden and accidental" pollutants.
    • Companies with PFAS-related liabilities should seek to transition away from their use, regardless of what insurance protection is in place.

    Get the Report


    CONDITIONS AND LIMITATIONS Gallagher's global operations, including a network of correspondent brokers and consultants, offers client-service capabilities in more than 130 countries around the world. This report and supporting information is not intended to provide legal or financial advice and reflects our understanding as of October 2023. It should not be regarded as a comprehensive statement of the law and/or market practice in the regions covered. You should not act upon information in this publication nor determine not to act, without first seeking specific legal and/or specialist insurance and risk management expertise. Should you require advice about your specific insurance arrangements or claim circumstances, please contact your Gallagher account representative.

    © 2023 Arthur J. Gallagher & Co.