Emerging PFAS Litigation and Its Impact on the Insurance Market
In recent years, per- and polyfluoroalkyl substances (PFAS) have emerged as a major driver of mass tort litigation in the United States, recognized for their durability in the environment and their potential impacts on human health. As of March 2026, the Aqueous Film-Forming Foams (AFFF) multidistrict litigation (MDL 2873) comprises approximately 15,220 ongoing personal injury claims. Municipalities face critical settlement deadlines throughout the year, while outcomes for personal injury claims remain uncertain, challenging umbrella and excess liability programs.
The casualty insurance market has adopted a firm stance through mid-2026, with umbrella and excess liability rates increasing by 5–20% or more from late 2025 into the first quarter of this year. Carriers have tightened underwriting standards and reduced per-layer limits for risks associated with PFAS exposure. Industries with high hazard potential, including chemical manufacturing, firefighting equipment, and airports, are experiencing significant capacity reductions and higher attachment points. According to WTW's 2026 Casualty Outlook, lead umbrella rates have risen by over 12% on average, with more than 25% of programs requiring restructuring due to limited carrier interest.
PFAS-related issues originate from their widespread use in firefighting foams, consumer products, and industrial processes, leading to claims concerning groundwater and bodily harm. Litigation is split between water providers, whose claims often settle, and personal injury claims alleging links to serious health conditions. Emerging contaminants like microplastics and phthalates are also becoming subjects of related lawsuits. Legal disputes often center on whether PFAS is a pollutant, affecting the applicability of pollution exclusions and coverage triggers across different policy periods.
Recent legal developments include New Jersey's significant $2.5 billion settlement with DuPont, Chemours, and Corteva for contamination issues, the largest of its kind for a single state. Furthermore, a $450 million agreement addressed additional claims related to 3M. Although a global settlement for personal injury claims remains elusive, projected payouts could vary widely based on individual circumstances. Insurance coverage disputes continue across the country, reflecting the complexity and variability of PFAS coverage litigation.
Looking ahead, regulatory changes at the federal level involve extended compliance deadlines for some PFAS drinking water standards to 2031, while state regulations enforce stringent standards, including broad product bans. The National Association of Insurance Commissioners (NAIC) is continuously monitoring these challenges and updating model language as needed. In response, policyholders facing PFAS risks should review historical insurance policies, negotiate endorsements for PFAS coverage, and conduct financial evaluations of insurers. Enhanced risk management practices, like documenting PFAS usage, can also aid underwriting processes.
PFAS and other emerging contaminants pose ongoing challenges for excess insurers, with the volume of claims and evolving regulatory landscape necessitating diligent risk management and proactive insurance strategies. Organizations that closely collaborate with brokers and legal counsel will be better equipped to navigate the complexities of PFAS-driven claims, maintaining robust insurance protection.