PFAS Update

Our survey findings reinforce the importance of non-insurance risk management as critical to avoiding claims and litigation costs for environmental engineers and consultants. From an insurance perspective, professional liability (PL) coverage for environmental engineers and consultants requires no modification to address any scope of professional services related to PFAS. No PL insurer operating in this space has (or will likely ever) place any PFAS exclusion on a PL policy in North America (it is worth noting that the opposite is true with regard to site-specific pollution liability policies purchased by facility owners/operators; the recognition of this fact should weigh heavily regarding contract and other non-insurance measures where an environmental professional knows or suspects its work is being relied upon in support of environmental insurance underwriting related to property transactions).

ASTM did not solve the PFAS non-scope question in its E1527-21 standards update. And as our survey results show, there is some divergence in the manner in which industry firms are approaching the issue in their Phase I ESA’s for clients. Because of the dynamic situation with state regulations, we urge caution in exactly how PFAS is addressed as a “non-scope consideration.” This is particularly the case when representing buyers of properties that could be impaired with some form of perfluorinated compound.

If PFAS are not hazardous substances under CERCLA, a discrepancy exists between state equivalents and federal law on the question of landowner liability protections. Until this discrepancy is resolved, does this create the situation where the risk could be greater in transactional scenarios when your firm represents a prospective purchaser than a seller?

Given the ASTM 1527-21 non-scope issue and state/federal regulatory inconsistencies, what exactly is the standard of care? This is a non-trivial question with a non-obvious and evolving answer.

Consider reliance letters, often requested by banks, or sometimes by clients, in relation to past Phase I ESAs. Where uncertainties such as the above exist, does this situation cause an environmental engineer/consultant to pause and reconsider reliance letter requests in relation to past reports? Would you charge the same price, or condition reliance letters in the same manner, where there is now a) a state PFOA or PFOS remediation standard and b) a recognized potential for PFAS impacts at the site that was not considered at the time of the report?

We were very pleased to see that a very large percentage of environmental engineers/consultants are not providing unlimited LoL’s, or even up to their full professional liability limits, for work involving PFAS. We were just as pleased to see that almost half said they would never do so, and those in the remaining balance said they would do so only 2% of the time or less. We believe that this is one of the single most important non-insurance risk management considerations for environmental engineers/consultants.

One area in particular where we advise caution: many firms in the industry operate under some form of master services agreement (MSA). Many of these MSAs have been in force for several years, with terms that were negotiated prior to the emergence of PFAS-related work. The LoL you may have been comfortable offering for other services, contaminants and situations and agreed to in the MSA (think municipal airport RCRA compliance) may not be appropriate for riskier PFAS-related work. Consideration should be given to addressing this (or attempting to) in individual task orders. And when renegotiating MSAs where you know or suspect PFAS-related investigation or consulting work could be part of task orders in the future, consider paring back the LoL in those specific situations. As our survey shows, private sector owners appear to be more favorably predisposed to reasonable LoL’s in this space, so this may be difficult with government entities.

It appears from our survey that many of the initial worries about the risks of widespread sample contamination (equipment, practices, PPE, cross contamination) have not come to fruition. On the other hand, virtually all environmental professionals now recognize that the extent of PFAS contamination is likely far greater than initially feared. Because the landscape of impacted sites is clearly larger than initially thought, environmental professionals will need to be extra careful when considering whether the potential for these compounds may exist, especially in states that have passed or have legislation pending creating a regulatory standard for cleanup.

Finally, we note that while there are a few promising remediation technologies for PFAS emerging, as of yet there is no magic bullet. In these situations, we strongly caution environmental professionals against providing performance guarantees for remediation systems. We have always given this advice even where:

• Remediation technologies are decades old
• Performance metrics and variables are very well understood
• Remediation standards are proven achievable with such technologies
• The standards are represented in parts per million or parts per billion

With currently-practical large-scale PFAS remediation technologies combining with regulatory standards measured in parts per trillion, going out on a limb with performance guarantees is a recipe for trouble. Or worse.