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PFAS "forever chemicals" and liability insurance: exclusions and gaps
Insurers now attach PFAS exclusions on top of the pollution exclusion. What the policies say, how older coverage fits, and what to check at renewal.
Per- and polyfluoroalkyl substances (PFAS) are a family of synthetic chemicals used for decades in firefighting foam, nonstick coatings, water-repellent textiles, food packaging and industrial processes. For liability insurance the practical news is simple: most general liability policies written since the mid-1980s already contain a pollution exclusion that insurers invoke against PFAS contamination claims, and since 2023 ISO has offered stand-alone PFAS exclusion endorsements that carriers attach at renewal. If your business makes, sells, uses or sits on land contaminated by PFAS, assume your current policies will not pay unless you have checked the wording, and look hard at the older policies in your files.
Why PFAS became an insurance problem
PFAS do not break down readily, they travel in groundwater, and they show up in blood and drinking water. That produces three streams of legal exposure that map onto insurance very differently.
- Water and contamination suits. Public water systems, states and landowners sue manufacturers, and increasingly the businesses whose wastewater or foam discharges reached a plant or aquifer. According to Insurance Journal (October 7, 2024, drawing on Carrier Management), 3M agreed to pay more than $10 billion and DuPont an estimated $1.19 billion to settle claims by U.S. public water systems in 2023.
- Product claims. Cookware, carpets, textiles, cosmetics, packaging and cleaning products are the subject of consumer claims and state product bans. Maine's first phase of PFAS sales prohibitions took effect January 1, 2026 for categories including cleaning products, cookware, cosmetics, dental floss, juvenile products, certain textiles, ski wax and upholstered furniture, according to a Fox Rothschild summary of the Maine Department of Environmental Protection's determinations.
- Regulatory cleanup duties. The more a chemical is regulated, the more a site owner's costs look like a mandated cleanup rather than an accident.
The regulatory picture is still moving. EPA's 2024 drinking water rule set enforceable limits of 4.0 parts per trillion for PFOA and PFOS and 10 parts per trillion for PFHxS, PFNA and GenX, plus a hazard index for mixtures. On May 18, 2026, EPA proposed to keep the PFOA and PFOS limits while allowing systems to request an extension to 2031, and to rescind the other limits (EPA's PFAS drinking water page). EPA's February 6, 2026 summary of its first-year PFAS actions lists the CERCLA hazardous substance designation of PFOA and PFOS as affirmed, and a November 10, 2025 proposal to narrow the TSCA section 8(a)(7) reporting rule as still pending (EPA key actions). Lighter drinking water limits do not shut the courthouse door; the lawsuits rest on state law, nuisance and product theories as much as on federal standards.
How each policy responds
| Policy | What it does with PFAS | Where it usually stops |
|---|---|---|
| General liability (general liability insurance: what it covers and what it does not), post-1986 | Covers bodily injury and property damage from an accident; products claims may sit in products and completed operations coverage | Total or absolute pollution exclusion; PFAS endorsement added at renewal |
| Umbrella or excess (commercial umbrella insurance) | Follows the underlying form | Own pollution exclusion; ISO PFAS endorsement for umbrella and excess |
| Businessowners policy (What is a business owner's policy (BOP)?) | Small-account liability | ISO businessowners PFAS exclusion |
| Pollution legal liability (pollution liability insurance and the pollution exclusion) | Cleanup and third-party claims from pollution conditions, usually claims-made | PFAS exclusions or sublimits being added; known conditions |
| Pre-1986 occurrence policies | May respond to injury that began while they were in force | Missing policies, insolvent insurers, known-loss arguments |
| Property (commercial property insurance: what it covers and what it doesn't) | Little; contamination is mostly excluded | Pollutant cleanup extensions are small |
The ISO forms are worth knowing by number. FC&S, the industry's form-analysis service, lists CG 40 32 for the commercial liability coverage part, CG 34 95 for the products and completed operations and owners and contractors protective parts, CU 34 54 for umbrellas, CX 21 97 for excess policies and BP 15 91 for businessowners. Reed Smith dates ISO's release of the CGL endorsements to June 2023. They remove bodily injury, property damage and personal and advertising injury claims tied to PFAS, and the definition is wide, reaching polymers, salts and precursors. Wording varies by carrier, many carriers use their own forms, and one common complaint is that "arising out of" language can reach any product containing PFAS even when the alleged harm came from something else.
The USI report cited by Insurance Journal said most insurers were mandating PFAS exclusions on general liability and products liability renewals, particularly for manufacturing, hospitality, retail and real estate owners. A 2026 RT Specialty market update expects contractors pollution markets to respond with outright exclusions or limits on PFAS exposures.
The pollution exclusion fight, and old policies
Before PFAS endorsements existed, insurers pointed at the pollution exclusion. From the early 1970s most CGL forms excluded pollution except sudden and accidental releases, and by the mid-1980s the "absolute" exclusion replaced that exception. Reed Smith's survey of the cases shows no uniform rule. In Tonoga Inc. v. New Hampshire Insurance Co. (N.Y. App. Div., 3d Dep't, 2022) the court applied the exclusion because the allegations described long-term dumping and spills. In Colony Insurance Co. v. Buckeye Fire Equipment Co., the court found a duty to defend where the claims alleged direct exposure to a product, which it did not treat as traditional environmental pollution. Product and completed operations claims are where policyholders have the best arguments, and exactly where the newer endorsements aim.
Disputes are live. On July 24, 2026, four CNA insurers filed a declaratory judgment action in the Southern District of Ohio asking the court to rule they owe no defense or indemnity to a South Carolina textile company sued by the Santee Cooper water agency over PFAS in wastewater, as reported by Insurance Business. The insurers had agreed in January 2026 to defend under a full reservation of rights. Those are allegations in a complaint, not a ruling.
Older occurrence policy forms matter because a CGL generally responds to injury or damage that happens during the policy period. PFAS exposure is progressive, so it can implicate many policy years, and a policy from before the absolute exclusion may carry no pollution bar. A renewal exclusion does not erase that. How the loss is spread across years differs by state: some "all sums" jurisdictions let you pick one triggered policy up to its full limits, others prorate by time on risk. Insurers raise known-loss, expected-or-intended and misrepresentation defenses, so the file of what you knew and when matters.
What underwriters ask
Expect questions on whether you manufacture, import, distribute or specify products with fluorinated coatings or foams, whether you have ever used aqueous film-forming foam, what your wastewater and stormwater discharge, which suppliers certify PFAS-free materials, and what testing exists at your sites. Zurich's global head of casualty told Carrier Management that the exposure mainly lands in premises and products liability. Answer accurately; a misstatement on the application is how a covered claim becomes a rescission fight. See insurance applications: why accuracy matters and what misrepresentation costs.
A hypothetical renewal
Say a 60-employee Georgia distributor of industrial cleaning chemicals, with a warehouse it owns, receives a renewal with endorsements it has not seen. Here is how to work through it.
- Ask the broker for a list of every added or changed endorsement and read the PFAS exclusion in full, on the primary and umbrella.
- Check whether the wording is limited to PFAS exposure or reaches any product or operation that contains PFAS.
- Ask whether any carrier offers to narrow it, for example to named products, or to carve back completed operations.
- Check the pollution policy for PFAS exclusions, sublimits and retroactive dates, because a claims-made form will not respond to a condition it excludes.
- Locate every old general liability policy and umbrella from the 1970s on, or have the broker search; keep them permanently.
- Review contracts with suppliers and customers. Indemnities you gave may now sit in an uninsured gap; see contractual risk transfer: shifting liability by contract and insurance.
- Give notice of circumstances or claims promptly under the right policy years, with counsel if a demand letter arrives.
Risk controls that help with underwriters and courts
Inventory every product, process and site input that could contain PFAS. Obtain supplier certifications and keep them. Phase out foam and coatings where alternatives exist, and document it. Test where history suggests risk. Record decisions about disclosure to lenders and buyers; contamination found during a sale becomes an environmental site liability and contractors pollution coverage question. Directors should know that Directors and officers (D&O) insurance explained policies can face disclosure claims if a known liability is not reported, though that is a separate, fact-specific analysis.
This guide is general information, not legal advice. Coverage disputes over PFAS turn on policy years, wording and state law, so involve coverage counsel when you have a claim or a large exposure.
Key takeaways
- Liability insurers use two tools against PFAS: the long-standing pollution exclusion, and PFAS endorsements ISO introduced in 2023 for primary, umbrella, excess and businessowners policies.
- Exposure sits in products, wastewater and site contamination; EPA's May 2026 proposals may relax drinking water limits, but the lawsuits do not depend on them.
- Read the PFAS endorsement at every renewal and ask whether it can be narrowed; check pollution policies for matching exclusions.
- Preserve every historical occurrence policy and umbrella; they may still respond to injury that happened years ago.
- Answer PFAS underwriting questions precisely and document supplier certifications and phase-out steps.