The German Insurance Association (GDV) has published a new exclusion clause for damage caused by per- and polyfluoroalkyl substances (PFAS). Here we inform you about the implications for liability insurance coverage and outline the next steps that will now follow.
GDV introduces exclusion clause for PFAS
The newly published clause from the GDV initially excludes PFAS damage from insurance coverage. In a second step, insurers can agree individually with customers under which conditions and to what extent damage caused by certain PFAS substances can be included again. The industry has sharply criticized this clause. PFAS, also known as “forever chemicals,” are found in many everyday items and are suspected of being harmful to health. Due to their longevity and the fact that they hardly degrade in the environment, they have been controversial for years. The risks posed by PFAS are difficult for liability insurers to calculate, as many of the more than 10,000 different PFAS compounds have not yet been sufficiently researched.
A blanket exclusion of PFAS would be just as wrong as a blanket ban on these indispensable substances. Instead, the insurance industry is calling for a differentiated and sustainable approach to PFAS. The first step in this risk dialogue is the PFAS clause announced by the GDV on a non-binding basis. This initially excludes PFAS damage from insurance coverage, but allows for individual agreements for the re-inclusion of certain PFAS risks.
To achieve this goal, liability insurers and industry must work closely together and discuss the risks of the respective PFAS compound in each application. The GDV is currently developing guidelines to facilitate the scientific and legal classification of risks.
The risk dialogue has the potential to clarify the risks of PFAS and promote the development of alternatives. In the long term, this could benefit insurers as well as manufacturers and users of PFAS.
“In order to achieve the most favorable negotiation results for our customers, we are continuing to monitor this development closely and will draw appropriate conclusions for the upcoming renewal. Unfortunately, similar situations have shown that insurers tend to exclude risks quickly and are then very reluctant to reinstate coverage and take a differentiated approach to risk assessment”, says Josephine Galz-Barthou, Head of Liability at the Hörtkorn Group, commenting on the current discussions and the efforts of insurers.
General information
What are PFAS? PFAS (per- and polyfluoroalkyl substances) are a group of chemicals used in many industrial and consumer products. They are known for their resistance to water, dirt, grease, and oil, as well as their high resistance to heat and cold. Health risks Some PFAS compounds are suspected of being harmful to health. Studies have shown that exposure to certain PFAS can lead to negative health effects such as cancer, fertility problems, and damage to the immune system. Environmental impact PFAS are persistent chemicals that hardly degrade in the environment. They have been detected in water, air, fish, and soil worldwide and can accumulate in the human body over long periods of time. Regulatory measures Both the EU and US authorities have now taken measures to reduce PFAS exposure, e.g., by banning their use in certain products or introducing drinking water standards. Current research Research on PFAS is ongoing. Scientists are working to develop better methods for detecting and measuring PFAS, as well as strategies for removing these chemicals from drinking water.
Further information and complete collection of clauses:
The GDV provides the complete exclusion clause and further background information on the PFAS issue on its website. You can find the information at the following link:
