If you own or operate commercial real estate, whether it’s a hotel, apartment complex, school, building or contracting operations, you need to be thinking about PFAS exposure and the possibility of a PFAS exclusion in your policy.
PFAS, or per- and polyfluoroalkyl substances, are a family of human-made chemicals nicknamed “forever chemicals” because they don’t break down naturally in the environment. Today, they’re everywhere: food packaging, municipal water supplies, waterproof clothing, yoga pants, nonstick cookware, medications and hygiene products.
Their widespread use means nearly every property is affected in some way. With new regulatory designations and a surge in lawsuits over the past few years, the risks and the costs are very real. If your coverage includes a PFAS exclusion, you could be facing those risks alone.
The Growing Legal Exposure
While pollution exclusions aren’t new, PFAS exclusions are changing the game. More insurers are carving PFAS out of their environmental and general liability policies. Property owners are often surprised to find that even though they’ve done nothing wrong, they could still be held responsible for contamination cleanup or third-party lawsuits. Without protection from a PFAS exclusion insurance policy, the financial fallout can be significant.
One Drop Is Too Much
Today’s regulatory requirements for PFAS contamination are extraordinarily low. The Environmental Protection Agency’s new drinking water standards are quite strict; detecting just a few drops of PFAS in an Olympic-size swimming pool could trigger a violation. This dramatic regulatory development has burst the door wide open for new legal liabilities, even for owners who believe their sites are “clean.”
Important key shifts:
- Since 2019, lawsuits tied to PFAS contamination have surged; initially, chemical manufacturers were the targets, but increasingly, it’s property owners, landlords and site operators.
- In 2024, the EPA formally designated PFAS chemicals as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), meaning stricter cleanup standards and increased "polluter payouts" for PFAS liability.
- Legal defense costs are climbing, even for owners with little or no direct connection to the original contamination.
PFAS Exclusions: A Lawsuit Waiting to Happen
Why would anyone just wait to be sued? With major class action lawsuits rising, sitting back is no longer an advisable risk. Today, simply owning a contaminated property can bring regulatory scrutiny, lawsuits and costly cleanup demands.
PFAS contamination is a silent liability — until it isn’t. Forever chemicals like PFAS substances used to go undetected in standard property assessments, only surfacing during deals, disputes or regulatory crackdowns. And while proving fault is messy, reputational damage, lawsuits, penalties and cleanup costs are even messier if you have a PFAS exclusion.
What It Could Cost You
Legal fees
Allegations of bodily injury from tenants or clients
Business interruption and income loss
Damaged reputation and tenant trust
Reduced property value
Solutions for PFAS Liability
The fix? Secure an environmental insurance program to cover your property or operations. Partner with specialized environmental advisors to design coverage that fills gaps in traditional liability insurance. Having an environmental insurance policy is a proactive approach to handling potential PFAS-related claims. Without adequate coverage, options vanish and expenses spike if PFAS substances are detected, so act early to shield against escalating litigious risks from forever chemicals.
How NFP Helps
NFP helps business and property owners manage emerging environmental risks like PFAS. We evaluate current policies, identify gaps and structure environmental insurance solutions tailored to each property's needs. Our team stays ahead of regulatory changes and works with specialized carriers to help secure protection where it’s available.
When it comes to environmental liability, what you don’t know can cost you. With NFP, you have the knowledge, strategy and support needed to move forward with confidence — even if your policy includes a PFAS exclusion.
Meet Your Environmental Practice Expert
