PFAS Exclusions in Commercial Insurance: What Brokers Need to Know

PFAS exclusions are now appearing across commercial general liability, pollution liability, and umbrella policies at a pace that rivals asbestos exclusion adoption in the 1980s. The EPA's April 2024 designation of PFOA and PFOS as CERCLA hazardous substances — paired with the first federal drinking water limits of 4 parts per trillion — activated cleanup cost liability for thousands of industrial and municipal facilities nationwide and triggered a corresponding wave of carrier underwriting action. Brokers whose commercial accounts manufacture, use, or are adjacent to per- and polyfluoroalkyl substances (PFAS) need to understand what the exclusions say, which lines are affected, which industries carry the highest exposure, and where specialty markets will write the coverage standard carriers are now declining.

What PFAS Are and Why They Have Become an Insurance Crisis

Per- and polyfluoroalkyl substances are a class of approximately 12,000 synthetic chemicals characterized by carbon-fluorine bonds — among the strongest in organic chemistry — that resist degradation in the environment, water, soil, and the human body. That persistence is why they are called "forever chemicals." PFAS were used in thousands of industrial applications from the 1950s onward: non-stick cookware coatings, firefighting foam (aqueous film-forming foam, or AFFF), water-resistant fabric treatments, food packaging grease barriers, semiconductor manufacturing processes, and paper mill sizing agents.

The insurance industry's PFAS problem has three distinct components that are converging simultaneously:

CERCLA hazardous substance designation. In April 2024, the EPA finalized a rule designating PFOA (perfluorooctanoic acid) and PFOS (perfluorooctane sulfonate) as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, 40 CFR Part 302). This means that any release of PFOA or PFOS above the reportable quantity triggers mandatory EPA notification and potentially unlimited cleanup liability — without proof of negligence. CERCLA imposes strict, joint, and several liability on potentially responsible parties (PRPs). A manufacturer whose product was used at a contaminated site decades ago can be named as a PRP regardless of whether it knew about the contamination.

Federal drinking water standards. Also in April 2024, the EPA promulgated the first National Primary Drinking Water Regulation for PFAS (89 Fed. Reg. 32532), establishing maximum contaminant levels (MCLs) of 4 parts per trillion for PFOA and PFOS individually and 10 ppt for mixtures including PFNA, PFHxS, and HFPO-DA (GenX). Public water systems must comply by April 2029. Utilities that now must treat contaminated source water — and can identify the sources of contamination — have a clear legal pathway to cost recovery against upstream industrial dischargers.

Litigation pipeline. The AFFF multidistrict litigation (MDL 2873, D.S.C.) has already produced landmark settlements: 3M reached a $10.3 billion settlement in June 2023 to resolve claims from water utilities contaminated by AFFF, and DuPont/Chemours reached a separate $1.185 billion settlement. These settlements established litigation templates that plaintiff firms are now replicating against manufacturers, users, and distributors of other PFAS-containing products. The nuclear verdict and social inflation environment affecting commercial liability broadly is amplifying PFAS verdict risk specifically.

How Carriers Are Applying PFAS Exclusions

ISO filed two PFAS exclusion endorsements in 2022 that most participating carriers have since adopted or used as templates for proprietary forms:

CG 33 64 — Exclusion — Per- and Polyfluoroalkyl Substances. This endorsement is the standard PFAS exclusion form that adds PFAS to the list of substances for which bodily injury and property damage claims are excluded from commercial general liability coverage. It defines "per- and polyfluoroalkyl substances" broadly to include any chemical in the PFAS class, not just PFOA and PFOS. Brokers should read endorsement CG 33 64 carefully on any policy where it appears: the definition is intentionally broad and encompasses substances the insured may not recognize as PFAS (for example, PTFE-based products in some manufacturing processes).

Non-ISO carrier endorsements. Many carriers, particularly those writing specialty chemical, manufacturing, and municipal accounts, have drafted proprietary PFAS exclusions that vary in breadth. Some exclude only bodily injury and property damage arising from PFAS; others also exclude personal and advertising injury claims and defense costs. The defense cost issue is critical: a policy that excludes PFAS claims but reserves the duty to defend until a final determination is made provides meaningfully different protection than one that excludes both coverage and the duty to defend from the outset.

Umbrella and excess lines. Most umbrella carriers are following form on PFAS exclusions, which means that if the underlying CGL excludes PFAS, the umbrella typically excludes it as well. Some excess carriers are writing broader PFAS exclusions than the underlying policy, meaning the umbrella could have a gap that creates a vertical program problem — a scenario worth reviewing on any account with industrial PFAS exposure.

Environmental and pollution liability forms. Standard pollution liability policies issued before 2021 may not specifically exclude PFAS. More recent forms typically do. However, specialty environmental liability markets (AIG Environmental, Zurich Environmental, Sompo, Ironshore) have developed PFAS-specific coverage extensions or standalone PFAS pollution liability products for accounts that can demonstrate PFAS exposure management programs, historical testing, and containment measures.

Which Industries Face the Highest PFAS Exposure

Not every commercial account has meaningful PFAS liability, but several industry sectors face acute exposure that should trigger active conversations at every renewal:

Firefighting and airports. Facilities that stored or used aqueous film-forming foam (AFFF) containing PFOS or PFOA are the highest-exposure category. This includes municipal fire departments, airport fire rescue (ARFF) operations, military installations, petroleum refineries with on-site fire suppression, and training facilities. The AFFF MDL has specifically targeted these users. Any client that used AFFF before 2018 (when the industry began transitioning to fluorine-free alternatives) should be assumed to have some PFAS exposure in soils and groundwater around former training or storage areas.

Textile, paper, and food packaging manufacturing. Manufacturers who used PFAS-based coatings for grease resistance, water resistance, or soil resistance in their products — or who purchased PFAS-containing raw materials — may face product liability claims from downstream users and environmental liability claims from contamination at manufacturing or disposal sites.

Water utilities and municipal entities. Public water systems and municipalities that distributed contaminated drinking water may face both regulatory compliance costs and third-party bodily injury claims from residents. Conversely, utilities that can demonstrate upstream contamination by industrial dischargers are plaintiffs — but their own liability exposure arises if they failed to test or notify when they should have.

Construction and environmental remediation. Contractors performing remediation at CERCLA sites or near PFAS-contaminated properties face contractor pollution liability exposure if PFAS is disturbed and migrates. See the construction industry insurance guide for the broader pollution liability context contractors need.

Semiconductor and electronics manufacturing. PFAS are used in semiconductor fabrication as etch agents and cleaning compounds. Fabs generate PFAS-containing wastewater that must be treated and disposed of; release events at or near manufacturing sites have triggered regulatory action and third-party claims.

Healthcare and medical device manufacturing. PTFE (polytetrafluoroethylene) and related PFAS are used in medical devices, implants, and surgical supplies. Medical device manufacturers may face product liability claims alleging PFAS exposure through implanted devices.

How to Identify PFAS Exposure in Your Client Accounts

The first step is adding PFAS to your renewal questionnaire for any commercial account in an affected industry. Specific questions to ask:

• Has the client ever used, manufactured, distributed, or stored products containing PFAS, including AFFF, non-stick coatings, water-resistant textiles, food packaging, or surfactants?
• Does the client's facility sit in a known PFAS groundwater plume area, near a military installation, near an airport, or near a manufacturing facility that used PFAS?
• Has the client received any regulatory inquiry, notice of violation, or demand letter related to PFAS contamination?
• Has the client completed any environmental site assessment (Phase I or Phase II ESA) in the past five years? If so, were PFAS tested for and with what results?
• Has the client's general liability or umbrella carrier added a PFAS exclusion to the current policy term that was not present in the prior term?

The last question is the trigger for immediate action: a mid-term PFAS exclusion addition without a corresponding specialty coverage placement leaves the client with a coverage gap that may not be apparent until a claim arises.

Coverage Options for PFAS-Exposed Businesses

Standard admitted carriers are broadly declining to write PFAS exposure on CGL policies. Coverage for accounts with material PFAS exposure must come from specialty markets:

Contractor pollution liability (CPL). For construction and remediation contractors, contractor pollution liability policies from specialty environmental markets typically address PFAS exposure if the account can demonstrate appropriate handling procedures. Coverage is available on both occurrence and claims-made bases; the claims-made form is more common and should be evaluated for retroactive date adequacy given the long latency of PFAS contamination claims.

Site pollution liability (SPL). For facility owners and operators — manufacturers, utilities, airports — site pollution liability policies from environmental markets can provide first-party cleanup cost coverage and third-party bodily injury and property damage coverage that the CGL now excludes. These policies require Phase I ESA documentation and typically a Phase II ESA for sites with known contamination. Placing a PFAS-exposed account in the E&S environmental market follows the same workflow as other hard-to-place risks — see How to Place a Hard-to-Insure Risk in the Surplus Lines Market for the submission and compliance framework.

Products pollution liability (PPL). Manufacturers whose products contain or contained PFAS need products pollution liability coverage that explicitly addresses PFAS bodily injury and property damage claims. This is a narrow specialty market; insurers will require detailed product disclosure, historical PFAS content documentation, and material safety data sheet history.

Captive or self-insurance structures. Large manufacturers with diversified PFAS exposure across product lines are increasingly exploring captive insurance arrangements to fund expected PFAS defense and indemnity costs. This does not eliminate the exposure but allows more predictable financial planning for what is now a recognized balance sheet liability.

What Brokers Should Do at Every PFAS-Affected Renewal

1. Read every endorsement page. Don't rely on carrier summaries. Locate the PFAS exclusion in the policy form, confirm whether it excludes defense costs as well as indemnity, and compare the definition of "PFAS" to your client's actual chemical footprint.

2. Document the gap in writing. If a client has identifiable PFAS exposure and you cannot obtain coverage for it, document in your file and in writing to the client that the CGL now excludes PFAS, what that means for their specific operations, and what specialty alternatives you pursued. E&O exposure for brokers who failed to identify PFAS exclusion additions is already appearing in claims.

3. Submit to specialty environmental markets early. Environmental underwriters take longer to quote than standard carriers. Build 60–90 additional days into your submission timeline for accounts that need PFAS coverage from the E&S environmental market. Incomplete submissions — missing Phase I ESAs, incomplete loss runs, or vague product descriptions — are the primary reason accounts don't receive competitive quotes from this market.

4. Revisit limits and program structure. PFAS liability is potentially long-tail and unlimited at the cleanup cost level under CERCLA. Legacy limits set before the PFAS liability landscape became clear may be materially inadequate. This is a limit adequacy conversation that belongs on the agenda of every annual review meeting for industrial accounts.

The hard commercial insurance market has already compressed capacity and elevated pricing across commercial lines. PFAS adds another layer of complexity that will push additional accounts into surplus lines for specific coverage components, even if the primary CGL placement remains admitted. Brokers who build PFAS fluency now will be better positioned to retain and win commercial accounts as this exposure continues to expand.

Frequently Asked Questions

Does a standard commercial general liability policy cover PFAS contamination claims?

In most policies issued or renewed after 2022, no. ISO endorsement CG 33 64 and carrier-specific PFAS exclusions now appear on the majority of CGL policies for industrial accounts. Even policies without a specific PFAS exclusion may deny coverage under the standard pollution exclusion, which excludes "pollutants" — a term carriers routinely argue includes PFAS. Accounts with PFAS exposure should assume no CGL coverage and seek specialty environmental markets for dedicated PFAS coverage.

Which PFAS substances are covered by the EPA's April 2024 CERCLA designation?

The April 2024 final rule (40 CFR Part 302) designated PFOA (perfluorooctanoic acid) and PFOS (perfluorooctane sulfonate) as CERCLA hazardous substances with reportable quantities of 0.00000002 lbs per day. Additional PFAS substances — PFNA, PFHxS, HFPO-DA (GenX), and others — are subject to the new drinking water MCLs and ongoing regulatory action but have not yet been designated as CERCLA hazardous substances as of 2026.

Does the CG 33 64 endorsement apply retroactively to past PFAS releases?

Yes, for claims-made policies with retroactive dates after the exclusion effective date. For occurrence policies, the PFAS exclusion applies to the current policy period. This is why retroactive date management is critical for specialty environmental coverage: a site pollution liability policy with an inadequate retroactive date may not cover historical PFAS releases that are only now being discovered and claimed.

Are umbrella policies affected by PFAS exclusions on the underlying CGL?

Most umbrella policies follow form, meaning if the underlying CGL excludes PFAS, the umbrella will as well. However, some umbrella carriers have drafted standalone PFAS exclusions that apply regardless of the underlying policy terms. Review both the underlying and umbrella forms — a mismatch between the two can create a vertical coverage gap where neither layer responds.

What specialty markets write PFAS pollution liability?

The primary specialty environmental markets for PFAS coverage as of 2026 include AIG Environmental, Zurich Environmental, Sompo International, Ironshore (Liberty Mutual), and several Lloyd's syndicates active in the environmental casualty space. Access to these markets typically requires a wholesale surplus lines broker with environmental specialty expertise and a complete submission package including site assessments, loss history, and PFAS use/management documentation.

Do PFAS exclusions apply to property damage claims or only bodily injury?

ISO CG 33 64 excludes both bodily injury and property damage arising from PFAS. Some carrier-specific endorsements add personal and advertising injury to the exclusion list. A few older carrier forms exclude only bodily injury, leaving some property damage coverage in place — but this is increasingly rare on new or renewed policies for industrial accounts.

Can a contractor who performed work at a PFAS-contaminated site be held liable for spreading contamination?

Yes. A contractor who disturbs PFAS-contaminated soil or groundwater without proper containment measures can be named as a PRP under CERCLA if the contamination migrates to a new area. Contractor pollution liability (CPL) coverage with a PFAS-specific extension is the correct tool; standard CGL PFAS exclusions will not respond to this exposure.

What documentation do underwriters require for PFAS-specific pollution liability coverage?

Environmental underwriters writing PFAS coverage typically require: a Phase I Environmental Site Assessment dated within 12 months; Phase II ESA results if PFAS was tested for; five-year loss history for environmental and general liability claims; a description of all PFAS-containing materials historically used at the site; current handling, disposal, and monitoring procedures; and any regulatory correspondence related to PFAS. Complete submissions receive competitive quotes; incomplete submissions receive declinations.

Arvori helps commercial insurance brokers manage complex coverage programs across all commercial lines. Whether your client faces PFAS exclusion gaps or other emerging liability exposures, Arvori's broker tools help you document exposures, track specialty placements, and present coverage recommendations clearly at every renewal.