Summary:  A new type of exclusionary endorsement is being made available under the ISO program to address exposures of PFAS chemicals. The endorsement has a proposed effective date of January 1, 2024.

PFAS is the abbreviation for perfluoroalkyl and polyfluoroalkyl substances, which are described by the National Institute of Environmental Health Sciences (NIEHS) as a "large, complex, and ever-expanding group of manufactured chemicals that are widely used to make various types of everyday products." According to the Interstate Technology Regulatory Council (ITRC), some industries and products that incorporate the use of PFAS include, but are not limited to, automobiles, pesticides, cosmetics, food processing, textiles, furniture and household products. While potential health impacts that exposures to PFAS could lead to are still being researched and thus remain uncertain, they have come under scrutiny due at least in part to their environmental presence, because they: 

  • do not break down in the environment,
  • can move through soils and contaminate drinking water sources,
  • build up (bioaccumulate) in fish and wildlife.

The CDC has more information on PFAS under their National Biomonitoring Program, contained in this Fact Sheet. The substances are found in rivers and lakes, and also in many types of land and water animals. 

Therefore, as an additional underwriting tool, ISO is making available the following endorsement available to exclude the liability exposures associated with PFAS substances.

BP 15 91 Exclusion – Perfluoroalkyl And Polyfluoroalkyl Substances (PFAS)

Section II – Liability is amended as follows:

A. The following is added to Paragraph B.

Exclusions:

This insurance does not apply to:

Perfluoroalkyl And Polyfluoroalkyl Substances

a. "Bodily injury" or "property damage" which would not have occurred, or "personal and advertising injury" which would not have taken place, in whole or in part, but for the actual, alleged, threatened or suspected inhalation, ingestion, absorption, consumption, discharge, dispersal, seepage, migration, release or escape of, contact with, exposure to, existence of, or presence of, any "perfluoroalkyl or polyfluoroalkyl substances".

b. Any loss, cost or expense arising, in whole or in part, out of the abating, testing for, monitoring, cleaning up, removing, containing, treating, detoxifying, neutralizing, remediating or disposing of, or in any way responding to or assessing the effects of, "perfluoroalkyl or polyfluoroalkyl substances", by any insured or by any other person or entity.

Analysis:

This endorsement is a broad exclusion precluding coverage for bodily injury, property damage and personal and advertising injury related exposures associated with the PFAS definition, including any loss, cost or expense arising out of abating, testing for, monitoring, cleaning up, or other related activities, of PFAS by any insured or by any other person or entity. Because of the prefaced wording, 'this insurance does not apply to', this is an absolute exclusion and as such there would also be no coverage for an insured's defense in connection with liability in connection with or relating to these substances.

B. The following is added to Paragraph F. Liability And Medical Expenses Definitions:

"Perfluoroalkyl or polyfluoroalkyl substances" means any:

1. Chemical or substance that contains one or more alkyl carbons on which hydrogen atoms have been partially or completely replaced by fluorine atoms, including but not limited to:

a. Polymer, oligomer, monomer or nonpolymer chemicals and their homologues, isomers, telomers, salts, derivatives, precursor chemicals, degradation products or by-products;

b. Perfluoroalkyl acids (PFAA), such as perfluorooctanoic acid (PFOA) and its salts, or perfluorooctane sulfonic acid (PFOS) and its salts;

c. Perfluoropolyethers (PFPE);

d. Fluorotelomer-based substances; or

e. Side-chain fluorinated polymers; or

2. Good or product, including containers, materials, parts or equipment furnished in connection with such goods or products, that consists of or contains any chemical or substance described in Paragraph B.1.

Analysis:

The exclusion is tied directly to the added definition in paragraph B. Note the application of the word 'any' as it pertains to perfluoroalkyl or polyfluoroalkyl substances. This broadens the definition to include those substances that may contain even only the slightest number or amount of the described alkyl carbons, and is not limited to those that are named. Again, this is what we would generally term a 'total' or 'absolute' exclusion.

Note: ISO has made available an Advisory Notice to Policyholders introducing this endorsement, as well as endorsements related to cyber and electronic data and privacy liability, BP P 024 12 23.

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