Reza Zarghamee and Tamara Bruno Offer Insights on Federal PFAS Limit Proposal

In an interview with Business Insurance, Environmental & Natural Resources partner Reza Zarghamee stated that if the rule becomes final, public water system operators may be subject to statutory penalties if PFAS concentrations exceed the established maximum contaminant levels in drinking water. The rule also would establish default cleanup levels for certain PFAS that regulators would look to in order to determine when a PFAS remediation is complete.

“They would have to take steps to address and clean up the PFAS contamination to attain the acceptable levels, which could be very costly,” he said. [Not only is this] “a low level that is difficult to attain if you’re in a situation where you have to clean up, but the technology for the remediation and also end-of-life disposal of these chemicals is still evolving.”

Insurance Recovery & Advisory partner Tamara Bruno asserted that historical commercial general liability insurance policies that do not have pollution exclusions or have limited pollution exclusions could potentially be a source to cover recovery costs.

“If you’re talking about water utilities, a lot of these infrastructure and water projects have been around for some time, so they may have historical policies,” she said.

Bruno said some policyholders may have already utilized, released or sold some of their historic policies. “That could be challenging, either for insurers who thought this claim was over, or for insureds because they have depleted their insurance in the prior mediation,” she explained.

 However, “[d]efense coverage may be available for certain PFAS-related claims even under a CGL [Commercial General Liability] policy,” she concluded.

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