In 2020, Verisk’s Emerging Issues and Arium teams embarked on a joint research project to better understand why certain liability risks seemingly disappear and others emerge into major insurance events. This project yielded an article in which we discussed which factors may contribute to an emerging risk fading away into history–or to making history itself.
This article applies three of those factors to help forecast a current emerging liability risk: PFAS (Per-And Polyfluoroalkyl Substances) exposures. PFAS, also known as “forever chemicals”, are a group of chemicals that have generated significant concerns related to their potential impacts on human health. There have already been over $1 billion in settlements paid to date related to the allegedly deleterious environmental and health effects caused by PFAS.
Are these settlements the beginning of an even more significant liability event? This article seeks to identify the mechanisms by which PFAS could continue to generate liability losses by using three of the emerging risk factors previously identified by the Emerging Issues and Arium teams:
- Evident harm: The evidence for causality between a risk and resulting harms could influence whether and how litigation related to the risk develops. However, even limited evidence for harms could still drive litigation.
- Cultural relevance: When a risk or harm emerges as a widespread public issue, litigation, legislation, and regulatory action that could translate into significant settlements and damage awards may follow.
- Substitution: Even when a substance known to be dangerous is banned from use or is phased out, this doesn't necessarily mean the risks are eliminated: New substances might replace the old and present new risks.
The evidence for causality between a risk and resulting harms could influence whether and how litigation related to the risk develops. However, even limited evidence for harms could still drive litigation. This dynamic is the essence of our evident harm factor.
Do PFAS present a hazardous exposure to human health? The answer, like PFAS themselves, is complicated.
There are some indications that PFAS exposure could impact fertility and thyroid-related hormones, be carcinogenic, reduce fetal growth, and weaken the immune system, among other things. However, research is ongoing. The evidence for deleterious human health outcomes remains somewhat uncertain and may depend on the type of PFAS and type of exposure. Current studies indicate that the strongest association between PFAS exposure and human health impacts occurs from long-term exposures at high levels.
Consumers might be exposed to PFAS from finished products, such as nonstick cookware, stain-resistant coatings on fabrics, cleaning products, and food products packaged in PFAS-embedded materials. Current research suggests the risks to consumers in these scenarios are typically low.
However, fetuses and infants exposed to PFAS may be at elevated risk. Furthermore, the constant development of new types of PFAS presents a moving target for researchers, and some have suggested that new “emerging PFAS” may be associated with human health impacts. Some states have moved to restrict or ban PFAS in certain consumer products, such as food packaging and furniture. This regulatory scrutiny may also increase attention on the potential hazards.
Occupational exposure to PFAS can occur in chemical and PFAS-embedded products manufacturing; workers in that sector are typically expected to have the highest levels of PFAS in their bodies. Occupational exposure could also occur from exposure to final products used in occupational settings, such as PFAS-embedded personal protective equipment for firefighters and in firefighting foam. There’s already been litigation involving firefighters being exposed to high levels of PFAS in firefighting foam and their protective equipment. It remains to be seen if litigation arises in relation to workers in other occupations where there is potentially significant PFAS exposure.
Entire communities may be exposed to PFAS through contaminated drinking water, typically when these communities are situated near chemical plants, wastewater treatment plants, and landfills. Communities may also be exposed if they’re situated near sites where PFAS-embedded firefighting foam has been used, such as military bases and airports. PFAS-contaminated drinking water is a substantial exposure pathway, given the length and intensity of exposure. It also appears that the potential harmful effects of PFAS are clearest in this context. Take cancer: The strongest evidence for cancer risk has been found for community exposures to contaminated drinking water.
This may be part of the reason why litigation against PFAS and PFAS-product manufacturers has focused on drinking water contamination, and why federal agencies and some states have passed regulations governing PFAS levels in drinking water.
Harm still to be determined
To date, PFAS-related litigation has been primarily concentrated on contaminated drinking water. Perhaps this may be due, in part, to the more apparent evident harm of PFAS-contaminated water to human health. If scientific research does establish a stronger link between PFAS exposures to consumers and workers and human health impacts, it may be expected that litigation could spread beyond community exposures. That being said, our other drivers may influence how litigation develops for these other exposures, even if the evidence for direct harm remains unclear or inconclusive.
When an emerging issue is the subject of a film, book, song, educational curriculum, or podcast, there could be enough public awareness to trigger numerous lawsuits. For example, following the 2015 release of the movie Spotlight, which chronicled efforts to uncover sex abuse involving priests, at least 15 states extended or suspended their related statute of limitations for bringing sexual abuse cases, opening the door for claims alleging sexual abuse dating back decades. One report indicated that this legislation enabled the filing of more than 5,000 new cases worth over $4 billion.
This example represents two of our emerging risk drivers: cultural relevance and, to a lesser extent, plaintiff sympathy. An emerging risk that has both of these factors may have a greater chance of mushrooming into a multi-billion-dollar loss. And in the case of PFAS, there are numerous films, books, and podcasts that may have already ignited the fuses of public awareness and victim sympathy.
A sympathetic plaintiff pool may also garner more attention from the general public, mainstream media, governments, or other publicly facing entities; ultimately bringing more attention to a given problem, and thus driving cultural relevancy. This publicity may then prompt other individuals to file their own lawsuits or join an existing class action suit.
A recent example of cultural relevancy driving lawsuits would be the sexual abuse scandals involving Hollywood executives, major universities, and the Catholic Church. Irrespective of harm, media attention focusing on these crimes likely drove other victims to come forward about their own abuse. One study from Duke University examined the impact on media and sexual assault reporting and found that “there were between 31 and 121 additional reports of sexual assault for each of the 38 high profile events captured.”
With that in mind, have there been examples in the media which might make PFAS more culturally relevant to the general population—or at least suggest a trend in that direction?
The short answer: Yes.
There have been several documentaries which focus on PFAS, some of which are critically acclaimed and, as a result, may gain a wider audience. A few notable PFAS documentaries include:
- The Devil We Know
The 2018 award-winning documentary examines the alleged contamination of a West Virginia town by a chemical manufacturer of PFOA.
- No Defense: The U.S. Military’s War On Water
The 2020 award-winning documentary discusses how some U.S. military bases have allegedly contaminated the drinking water of over 650 municipalities located nearby.
- Great Lakes Now (PBS Series)
The award-winning PBS documentary series began in 2019 and includes multiple episodes about alleged PFAS contamination of drinking water in the Great Lakes region.
Dramatic film: Dark Waters
In 2019, Hollywood released the legal drama Dark Waters inspired by the West Virginia PFOA case. The film grossed over $23 million worldwide. The film’s lead actor and producer, Mark Ruffalo, has joined activists in supporting various regulatory activities aimed at curtailing of PFAS. Celebrity involvement may increase the likelihood that the general population becomes aware of an issue such as PFAS.
New book by known activist: Erin Brokovich
In 2000, the film Erin Brokovich, centered around the $300+ million lawsuit famously won by Erin Brokovich in the 1990s regarding contamination of groundwater with toxic chromium allegedly caused by a utility in a town in California. The film was a success, grossing over $250 million worldwide. The film focused on the quality of drinking water of a single town but in 2020, Brokovich published a book about the quality of drinking water for the entire nation, including concerns about PFAS.
According to Statista the number of people in the U.S. listening to podcasts is surging, with an expected 160 million listeners projected by 2023. Some of these listeners have been hearing about PFAS:
- Dark History: In June 2021, this podcast series interviewed an attorney involved in the West Virginia PFOA case; the podcast trended as a highly listened to episode, and a related video also trended globally.
- Talking PFAS: An Australian journalist has been podcasting specifically on PFAS since 2018.
- Words On Water: This podcast has been hosted since 2017 by the Water Environment Federation (WEF), “a not-for-profit technical and educational organization of 35,000 individual members and 75 affiliated Member Associations representing water quality professionals around the world.” PFAS is often a topic of discussion.
How might cultural relevance and plaintiff sympathy drive legislative and regulatory activities?
Over time, the heightened cultural relevance may spark various legislative and regulatory efforts related to PFAS. In fact, those efforts are already underway:
- In June 2021, Wisconsin Public Radio reported on a rule proposed by state regulators to develop ground and drinking water standards that address "recommendations for new standards for 22 substances including individual standards for 6 pesticides, individual standards for 12 per- and polyfluoroalkyl substances (PFAS), and combined standards for 4 PFA."
- In April 2021, the United States Environmental Protection Agency (EPA) announced a plan to create an "EPA Council on PFAS" on its web page dedicated to PFAS information. In 2019, the EPA announced new validated methods for testing short-chain PFAS in drinking water.
- In April 2021, a congressperson promoted their sponsorship of a bill titled "The PFAS Action Act" on their website. Of interest, Mark Ruffalo participated in the announcement of this bill. In June 2021, the same congressperson later promoted their sponsorship of the bill titled "No PFAS in Cosmetics Act." Notably, both bills were publicized on the congressperson's Twitter feed, which has about 98,000 followers.
In regard to plaintiff sympathy, per the National Law Review, existing PFAS lawsuits appear to be focusing mostly on environmental exposure, and the Review notes that some settlements have been “eye popping.”
Even when a substance known to be dangerous is banned from use or is phased out, this doesn't necessarily mean the risks are eliminated: New substances might replace the old and present new risks. This dynamic is the essence of our substitution factor.
On the surface, it seems simple. If certain types of PFAS are potentially dangerous, stop using them on industrial sites and incorporating them into consumer products. Easy enough, right?
Well, there's a reason that these chemicals became so pervasive. They can be really useful! Non-stick cookware, fast food wrappers, and aqueous film forming foam (AFFF) are just a few products that are enabled or enhanced by the properties of PFAS.
Therefore, the process of phasing out PFAS is two-pronged. One step involves the leading manufacturers reducing—and eventually eliminating—their use of these chemicals. Another is identifying an adequate substitute(s) in a relatively short time period that can enable the continued use of these products and pose no danger to the environment and people.
These dynamics can increase the risk of a "regrettable substitution," a scenario in which a chemical that contributes to health concerns is replaced by one with less data available and could actually pose as much—or even more—of a threat than its predecessor. One commonly cited example of this is a chemical that was incorporated into baby bottles and other plastic products: Bisphenol-A (BPA). Bisphenol-S (BPS) was eventually used in lieu of BPA and concerns subsequently emerged that BPS could be just as dangerous as BPA.
It will be critical to monitor for similar developments as substitutes for different chemicals of the PFAS family that are known to be pervasive in the environment (e.g. PFOS and PFOA) are deployed. One alternative that has already emerged is swapping so-called long-chain PFAS, which historically were more commonly used and includes PFOS and PFOA, with short-chain PFAS.
However, various studies have already indicated that these short-chain PFAS still contain properties that may pose health risks, and that there’s a limited amount of data about the potential toxicity of these alternatives. One study prompted the Food and Drug Administration (FDA) to conclude that the potential health risks from some short-chain PFAS have been underestimated, and as a result, several manufacturers will voluntarily phase out three short-chain PFAS.
Additionally, there’s already been litigation pertaining to short-chain PFAS. Shortly after a PFOA substitute was found in the Cape Fear River watershed in North Carolina, a consolidated class-action lawsuit was filed on behalf of thousands of individuals who live in the Cape Fear River basin against two leading manufacturers of this PFOA substitute. It's also important to recognize that the risks of substitution may extend beyond the health impacts of the new chemicals; the quality of the products that they’re incorporated into may be affected as well.
Consider the origin of PFAS-based AFFF. After a catastrophic fire on a U.S. Navy aircraft carrier killed 130 people on board and nearly destroyed the entire ship in 1967, manufacturers and scientists used PFAS to develop a firefighting foam that would be highly effective against petroleum fires.
Over 50 years later, it doesn't appear that a viable substitute for PFAS foams has been discovered. A 2020 article posted on the U.S. Department of Defense (DoD) website includes a comment from the deputy assistant secretary of defense for environment, who says that there was no PFAS-free foam available that would meet the DoD's strict standards for putting our fires quickly.
Given that PFAS-based AFFF is used to suppress some of the most dangerous fires, there could be some major implications if a less effective substitute is ultimately deployed.
In a rapidly evolving world, it can be difficult to find a signal through the noise. Ideally, this exercise in breaking down an emerging risk into its key attributes helps you get a sense of some of the considerations involved with PFAS liability risks.
If you seek more background information on PFAS and wish to stay up to date on the latest developments, Verisk Emerging Issues has a full subtopic page (login required) dedicated to analysis tailored to risk management and insurance professionals. You can also contact us at email@example.com.