April 29, 2024

The EPA Establishes the First-Ever Nationwide Limits for PFAS in Drinking Water

The Federal EPA Administration issued the first-ever national, legally enforceable drinking water standard to protect communities from exposure to harmful “Forever Chemicals”. The term forever chemical refers to a family of chemicals specifically per- and polyfluoroalkyl substances (PFAS), also known as GenX chemicals.

Forever Chemicals pose a pervasive environmental threat, the EPA maintains. PFAS is a category of chemicals widely used in the marketplace since the 1940s to repel oil and water, and to resist heat. These compounds are found in everyday products such as nonstick cookware, stain-resistant clothing, and firefighting foam. Exposure to certain PFAS substances over an extended period can cause illness and possibly cancer, the EPA and clinical experts maintain. PFAS exposure during critical life stages such as pregnancy or early childhood can adversely impact health.

These chemicals are now defined under the Resource Conservation Recovery Act (RCRA) as hazardous substances.  Liability for cleaning up RCRA materials at sites where owners have shirked responsibility may fall under the Comprehensive Environmental Response Compensation and Liability Act (CERCLA), also known as Superfund.

Here’s what you need to know:

  • Due Diligence: Buyers and sellers of industrial property or other properties impacted by environmental contamination will need to pay close attention to Phase I and Phase II investigation reports for these substances during due diligence.
  • Cleanup Protection: Property owners with current Voluntary Cleanup covenants or those seeking covenants from the Ohio EPA should investigate whether they have or will have protection from costly cleanup requirements for sites with covenants or sites under agency oversight.
  • Identifiable Responsible Parties: Manufacturers of PFAS, liable to Superfund litigation, likely will turn to distributors, generators, transporters, processors, and all parties involved in any way as Potential Responsible Parties (PRP) under CERCLA.  As a PRP this would likely lead to a shared responsibility to pay cleanup costs.
  • Ask the Questions: How will your business handle contract requirements in which hazardous materials are defined? How will indemnifications be affected in service agreements? How will insurance requirements be addressed under the current insurance policy language?

All these common contractual matters will affect how you manage and mitigate risk with insurance.

Dating back to the mid-1970s, legislation has triggered environmental regulation. Environmental regulation leads to laws and enforcement actions. Consequently, our country’s industrial, commercial and consumer markets are impacted by compliance requirements, exposure to litigation, fees and a major impact on operational expenses and business development.

What’s the impact of new PFAS regulations on business?

When asked, Mr. Snyder stated, “We have impacted clients by partnering with them, serving, protecting, and insuring their business and family interest from environmental and regulatory risk for decades. Our insurance carrier partners trust us; therefore, they have become proactive and eager to help us solve complex problems with creative solutions and comprehensive products.”

What now? Understand. Identify. Plan. Mitigate.

You can effectively and economically solve complex environmental risk problems when you partner with a knowledgeable, experienced advisor that knows the market, understands the regulatory nuances, and has your best interests in mind. The Fedeli Group’s Environmental Practice Group led by Robert Snyder, CPCU, CIC, is here to help you focus and reinforce your management team’s efforts. Let’s be proactive — and intentional in how we plan and manage change.

Let’s start a conversation and get ahead of the legislation.

Our mission is to help clients protect assets and enhance employee outcomes through the delivery of exceptional risk management and employee benefit consulting services and products.

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