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Roux Insurance Update: PFAS Limits and Potential Insurance Impacts

Posted on December 01, 2022

To help keep you up to date on current developments, Roux is providing this information to summarize topics pertinent to the insurance industry that you may find useful. 

Perfluorooctanoic acid (PFOA), perfluorooctane sulfonic acid (PFOS), and Perflurobutane Sulfonate (PFBS) are three substances that fall within a broader category of compounds called per- and polyfluoroalkyl substances (PFAS). PFAS are an environmental concern stirring up quite a commotion in the environmental and insurance industries due to their suspected toxicity. As these emerging contaminants become more understood, Delaware and Pennsylvania are joining the short list of states (Massachusetts, Michigan, New Hampshire, New Jersey, New York, Vermont, and Maine) that have recently laid their own groundwork to implement enforceable limits (aka Maximum Contaminant Levels [MCLs]) in drinking water that are currently unregulated at the Federal level. Pennsylvania has taken regulations a step further, and has even implemented groundwater and soil standards (i.e., Medium-Specific Concentrations [MSCs]) for PFOA, PFOS, and PFBS as of last year. Additionally, the New Jersey’s Department of Environmental Protection (NJDEP) has issued Interim Soil Remediation Standards, with no phase-in period, which means that these Interim Soil Remediation Standards are applicable as of October 17, 2022.

See how each of these states are implementing their plans and what it means for the insurance industry below.

  • Delaware
    • Drinking Water
    • Delaware’s Division of Public Health (DPH) and Delaware’s Natural Resources and Environmental Control (DNREC) have set forth the following regulations for the Public Drinking Water Systems:
      • PFOS – 14 parts per trillion (ppt)
      • PFOA – 21 ppt
      • PFAS – If the sum of PFOS and PFOA >17 ppt
    • Once enacted, the proposed regulatory framework would require water systems to collect samples by Spring 2023.
  • Pennsylvania
    • Soil/Groundwater:

Pennsylvania Soil/Groundwater Chart

    • Drinking Water
        • Pennsylvania’s Environmental Quality Board has proposed to amend Chapter 109 relating to safe drinking water, which includes establishing the following regulations:
          • PFOS – 18 ppt
          • PFOA – 14 ppt
  • New Jersey
    • NJDEP Interim Soil and Soil Leachate Remediation Standards: 

NJDEP Interim Soil and Soil Leachate Remediation Standards Chart

  • Insurance Impacts
    • After regulating drinking water, agencies typically begin to evaluate and develop regulatory standards for other media (groundwater, soil, indoor air, ecological criteria, etc.). This rule would affect due diligence efforts, All Appropriate Inquiries (AAI), and Phase I Environmental Site Assessments.
    • Active environmental cases will be required to investigate these substances. Closed environmental cases may be required to investigate these substances due to triggering events (change in property use, a new discharge, etc.). If identified, remedial investigations and subsequent remedial actions for PFAS could reopen closed cases and dramatically affect the timeline and costs of an environmental cleanup.
    • Surrounding properties may argue PFAS substances migrated from your property, prompting legal action and supplemental investigations.

For more information on PFAS limitations and potential insurance implications, please contact one of our experts by filling out the form below.

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