January 21, 2025 • 19 mins
Could "forever chemicals" like PFAS be the new asbestos for the insurance industry? Join us on the Placing You First podcast as we unpack this pressing issue with CRC Environmental Broker Sean McLaughlin. We explore how these persistent chemicals infiltrate our everyday lives, from kitchen cookware to essential firefighting gear, raising alarming health concerns. Listen as we navigate the complexities of managing PFAS risks and insurance challenges. We discuss the proactive measures clients can take to address PFAS exposure and the critical role wholesale brokers play in managing expectations and ensuring proper coverage.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Amanda Knight (00:01):
Welcome back to the Placing you First podcast,
where we tackle today's hottesttopics in insurance.
I'm Amanda.
Scott Gordon (00:08):
And I'm Scott.
Today's episode tackles therising concern of PFAS, commonly
known as forever chemicals, andtheir far-reaching impact.
Amanda Knight (00:18):
From manufacturing to real estate.
Pfas are influencing liabilityregulations and even insurance
coverage.
Joining us to unpack this allis Sean McLaughlin, a CRC
environmental broker.
This is the Placing you Firstpodcast from CRC Group.
Scott Gordon (00:34):
This podcast features news and insights from
a vast knowledge base of over5,100 associates.
Amanda Knight (00:40):
Who write more than $35 billion in premium
annually.
Plus, we give you the latestinformation on what's happening
at CRC.
This is the Placing you.
Sean McLaughlin (00:49):
First podcast and now the hosts of the podcast
, Amanda Knight and Scott Gordon.
Amanda Knight (00:55):
Welcome Sean.
Thanks for having me today.
Scott Gordon (00:57):
Now, Sean, can you give us a quick primer on PFAS
and why they're called ForeverChemicals?
Amanda Knight (01:03):
It sounds so ominous.
Scott Gordon (01:04):
Yeah, it does.
Sean McLaughlin (01:06):
Sure, yeah, definitely in the spotlight
right now, and I mean I knowwe've seen some of the billion
dollar verdicts come out.
Dark water was in the news onthe big screen a few years back.
And then, from insuranceperspective, we're seeing
policies from all differentcoverage points include
exclusions.
Perspective, we're seeingpolicies from all different
(01:27):
coverage points includeexclusions.
We are fielding questions allday long on PFAS.
Why do I have a PFAS exclusionand how does it affect my client
?
A lot of nervous phone calls,but PFAS is really all around us
.
Pfas was developed, I think, inthe 30s, 40s as a polymer to
help resist heat, oils, stains,water, you name it on a bunch of
(01:51):
different products.
It was a DuPont product andfrankly, it works really well
and that's why we see it reallyall around us today.
It's historically been used ina ton of products, from your
Teflon pans to your Gore-Texjackets to your firefighting
(02:11):
retarded.
So the concern of our PFAS nowis that it's all around us.
I believe it's considered acarcinogen too.
So it's been linked to,obviously, medical concerns and
because it is all around us andin all the products that we use,
it's kind of an ongoing hotbutton issue of who is going to
(02:34):
pay to clean it up and who isresponsible from a liability
standpoint?
Amanda Knight (02:46):
around us right At this point, we know that it
is found in about almost 100%,if not 100%, of all humans over
the age of 12.
And recent research found it inlike 84% of 114 tested global
waterways.
So it's literally everywhere.
But you know, we typically havethought about it in recent
years as far as like, as likethe things you listed right the
(03:07):
pans, the firefighting gear andequipment, the firefighting foam
, carpet, things like that,stain resistant fabrics but I
think that now we're findingthat there are even more places
than that, more than most peoplerealize, and there are some new
places that they're starting tocome to light throughout the
production or distribution chain.
(03:28):
Is that right?
That is right?
Sean McLaughlin (03:30):
And we're.
You know the concern with itand because it was so widespread
over the years, and a bunch ofdifferent products.
And you're right, I think therewas a Netflix documentary or a
YouTube documentary years agowhich I think they only found a
very small segment of thepopulace in the world that were
not cross-contaminated with PFASin their bloodstream.
(03:53):
So it really is all around us.
Amanda Knight (03:56):
I think we've now seen lawsuits with PFAS tied to
baby wipes, fertilizers,property contamination, lots of
different places.
Sean McLaughlin (04:06):
Absolutely correct.
Yeah, I mean we're seeing itfrom a product standpoint.
We're having questions from acontracting standpoint.
You know whether or not youknow there's an exacerbation of
the existing PFAS in the soil orgroundwater because of our
construction activities.
You know, even from acontracting side, the PPE and
protective equipment that ourcontractors and our
(04:27):
subcontractors are utilizing.
What is the PFAS exposure there?
We are trying to adhere to arisk management approach by
recommending or not evenrecommending, requiring some PPE
equipment potentially.
And what is the PFAS exposurethere?
From a work comp standpoint orfrom an action over standpoint,
(04:49):
it's kind of far reaching.
We are seeing lenders inquireabout it as part of a real
estate transaction, privateequity groups.
We're seeing exclusions fromthe contracting standpoint,
manufacturing distribution.
We're seeing some of thestandardized markets include
absolute PFAS exclusions undertheir GL.
(05:10):
And I think that's the scarypart for most in the marketplace
and we'll probably touch onthat is we're starting to see
carriers no longer rely on thepollution exclusion.
They're treating it as similarhow they would have the asbestos
exclusion with a separate PFASexclusion.
They're treating it as similarhow they would have the asbestos
exclusion with a separate PFASexclusion.
Amanda Knight (05:27):
Now I know that with this far-reaching impact
come lawsuits.
Right, that's not a surprise toanybody, I know.
Back in June of 2023, you know,multinational industrial
conglomerate 3M reached a whatis considered by many a historic
settlement over PFAS withpublic water suppliers, because
(05:48):
PFAS was present in drinkingwater.
So under that settlement, thatcompany will pay $10.3 billion
yes, with a B to plaintiffs overa 13-year period.
And that lawsuit is one of thelargest to date involving PFAS
and I think it served, you know,sort of as a wake up call,
because it was everywhere in themedia.
(06:09):
It really sort of got everyonethinking about PFAS.
So when other industries or,you know, verticals look at
something like that, what doesthat mean for them?
Does that sort of set off alarmbells and cause them to take
any sort of specific action, orshould it?
Sean McLaughlin (06:28):
It should.
I think right now we are stillkind of in that gray area from a
litigation standpoint andadministrative standpoint as
well as, frankly, an insurancestandpoint standpoint.
As well as, frankly, aninsurance standpoint.
I think there was a study donea few years ago where Lloyd's
(06:48):
put out what is the economic andloss predictor for PFAS claims
and it was astronomical.
But we're kind of at acrossroads in some aspects and
still kind of in a gray area,because you see these large
billion dollar payouts and andfrankly you know, we are seeing
the claims from different stateepas uh impacting different
(07:13):
players, whether or not be thecontracting, real estate uh
transactions or or frankly, justlike redevelopment and
brownfield cleanup standards.
But why I say it's such a grayarea right now is it's not
universal.
There is a push to beimplemented a universal standard
(07:36):
for cleanup, but where we'reseeing a lot of the gray area is
who's impacted and where the Iguess the fines and penalties
from your state EPA or yourclaims for liability are
stemming from there's stilldifferent cleanup standards and
frankly, some of those cleanupstandards are, I would say, a
(07:59):
little onerous to some clientsfrom an economic standpoint as
well as just a feasibilitystandpoint.
Scott Gordon (08:06):
Yeah, and it's one thing to talk about big giants
like 3M and BP or whoever whocan drop billions of dollars on
these things and still be inbusiness, but what are the
ripple effects for, say, thesmall guys, small businesses?
Sean McLaughlin (08:20):
That's where it gets scary, because there's no
clear-cut answer.
You know I'd lie to you if Ifelt like, oh yeah, I can
absolutely get you PFAS coverageright now without you telling
me what you do.
Is PFAS coverage achievable inthe marketplace?
Yes and no.
It really depends on youroperations, the exposures, where
(08:44):
it's coming from.
There's a lot going into it.
It is not a slot-ratedinsurance.
Underwrite it.
Really.
You kind of have to understandthe exposures, understand what's
going on, understand where theclaims are coming from.
What's the potential to getbrought into one a claim or two.
The potential to get broughtinto one a claim or two.
(09:07):
The potential of the state, epaor, frankly, any administrative
authority in that jurisdiction,to re-brought you in from a
cleanup or a BIPD issue?
How, from an economicstandpoint, how can these small
when I say small, anybodyoutside of a billion dollar that
can handle a billion dollarsettlement on your balance sheet
(09:28):
?
I don't know.
I think there's a lot more outthere that cannot how can they
protect themselves?
And I think the biggest answerto that question is
understanding your exposure toPFAS, understanding how PFAS one
1 affects your business.
What is your exposure to it,whether or not it be from a real
(09:48):
estate transaction?
What is your historical use ofPFAS?
What is the historical PFAS ofthe sites around you From a
contracting exposure?
Again, we talk about PPE and wedo a lot of environmental
contractors and so is ourenvironmental contractor being
testing for PFAS?
Are they sampling?
(10:10):
You know we can get broughtinto suits that way that one
maybe our environmentalcontractor was not testing for
it.
Or you know the allegation thatwe didn't test the standards or
potential.
If we were a driller, you knowthe exacerbation or the movement
of it with soil and groundwater.
It's really there's not astraight answer to that.
It's knowing your exposure andhow PFAS is how you could be
(10:33):
potentially liable for it, which, if you don't even know what
PFAS is, that's a good startingpoint.
Amanda Knight (10:39):
Well, and we've got a couple articles out there
that can fill you in on all ofthat background.
If you visit crcgroupcom andclick on our tools and intel
button Now I've been around longenough to kind of be able to
make this connection in my mind,and I know, scott, you have too
.
Maybe, sean, people refer toPFAS as sort of the new asbestos
for insurers.
(11:00):
There may be some around whoare a little newer, younger than
we are.
Maybe they don't know what thatmeans, but you've been around a
little while.
You know what asbestos is.
What is that?
What do we mean when we say thenext asbestos, when we're
referring to to PFAS?
Is it just the extensive,far-reaching nature of it or the
(11:21):
severity or both?
Sean McLaughlin (11:23):
I think a little bit of both.
If you look at any propertyconstructed prior to 1970, even
a little after that, there's thepotential of asbestos
containing materials throughoutthat building.
So it is widespread in nature.
From that standpoint, and tothat same regard it's you know
(11:44):
what is the liability associatedwith it.
You know, in that case, withthe asbestos, the carriers to
this day still do not rely onthe pollution exclusion under
their GL.
So it's the fact that an ISOversion of the PFAS exclusion
was introduced.
Iso version of the PFASexclusion was introduced.
I wouldn't say it was a wake-upcall, but it was in some
(12:10):
aspects the first time agents orinsureds were even
understanding or hearing aboutPFAS.
So the fact that that wasintroduced just shows the
potential economic impact andconcern from carriers,
reinsurance partners, everyonereally.
Scott Gordon (12:23):
Yeah, I mean, I don't think anyone in this room
knew what a PFAS was, say 10years ago At least.
Sean McLaughlin (12:30):
I didn't.
I'll say, I've been doingenvironmental insurance for a
while now and I can tell you,when I started, I never heard of
PFAS.
Scott Gordon (12:39):
Are there any proactive steps that brokers and
insureds can take, and how doesa wholesale broker fit into the
process?
Sean McLaughlin (12:46):
I would say yes .
I mean it really does startwith understanding what your
exposure to PFAS is.
When I said coverage for PFASwas achievable in the
marketplace, it is and it isn't.
It really depends on theexposure and I think where the
key role of especiallyenvironmental wholesalers in
that space is understanding theexposure, understanding what's
(13:08):
achievable, setting realisticexpectations for clients, but
also not only knowing where togo.
You know, pfas coverage from acleanup standard might not be
achievable, but there are waysthat we can still potentially
get PFAS coverage, and I sayit's excessive indemnity
(13:31):
agreements in place,environmental indemnities and a
purchase and sale agreement that, in order to purchase a
property, we're doing fullremediation installing carbon
filters, cleaning out thewastewater treatment plants and
retention ponds.
So there's a lot of, I wouldsay, proactive approach that
(13:59):
we're seeing from both realestate transactions as well as
ongoing manufacturingdistribution ops.
For the contracting side, we'reseeing some markets that include
full PFAS exclusions oncontracting risk, whether it be
your GCs and trades or yourenvironmental contractors.
For the environmentalcontractors I kind of equate it
to adding an oil spill cleanupexclusion on an emergency
(14:21):
response contractor.
You can't exclude what they'rebeing paid to do.
That's the whole point ofinsurance, so making sure you're
protecting your client for whattheir true exposures and
liabilities are.
And it's asking those questions.
If we're insuring amanufacturer or distributor,
it's asking the question of youknow what's their exposure to
(14:42):
PFAS?
You know, who are theirsuppliers, what kind of
environmental, what kind ofindemnity agreements in place,
inquiring about their insurance.
You know, if we're beingsupplied products that contain
PFAS, we want to make sure thatwe are correctly identifying
who's responsible and where.
You know where ourresponsibility and liability
really lies.
It truly is a risk managementapproach to understanding PFAS
(15:05):
and how to protect our clientsor at least offer advice, more
than anything else.
Amanda Knight (15:12):
Well, we are nearing the end of our time
today, so I'm going to take astab at sort of wrapping up our
key message here and, sean, youcan chime in at the end if
there's anything that you wantto add.
Pfas exposure is pervasive andthe risks are growing.
Awareness, compliance and theright insurance policies and
relationships can make all thedifference.
(15:34):
Is there anything you'd add assort of our key takeaway for our
listeners today?
Sean McLaughlin (15:39):
No, I would just say that we're to the point
with PFAS, especially with theenvironmental markets, that we
are seeing a I would hate to usethe word softening, but we are
getting to a point wherecarriers are at least willing to
have the discussion around PFAS, whether or not that'd be a
full removal and exclusion, orat least carbacks, or at least
(16:01):
potentially, depending on therisk and exposure, having that
conversation around coverage forTPOS.
Scott Gordon (16:06):
Yes, like now that we know what it is and it's
killing all of us, let's dosomething.
That's a story old as time.
We've been using something forour whole lives and then we're
like, well, that was bad for us.
Well, anyway, okay, Sean, we'vemade it through the hard part
of the podcast.
Congratulations, we will besending you your little ribbon
in the mail.
(16:27):
But now we have a little funsection here that we like to
call Rapid Fire, where you justgive us the answer that's right
off the top of your head andhere we go.
First question is what was yourlast impulse buy and was it
worth it?
Oh, that's a good question.
Amanda Knight (16:45):
I mean, it is the holidays, the season of all
things, impulse buy.
Sean McLaughlin (16:49):
Yeah.
Scott Gordon (16:51):
And it didn't have to be for you.
Amanda Knight (16:52):
It could be like that impulse buy in the toy
aisle that kept your kid quietand calm for the 30 minutes you
really needed it to.
Sean McLaughlin (17:01):
Yeah, I have a five-year-old and a two-year-old
, so that was probably a safebet.
I tell my kids I'm not gettingthem toys, and then I get them a
toy.
I always tell people that Inegotiate and broker every day,
but when it comes to negotiatingwith my wife or kids, I'm awful
at it.
So, yeah, it's definitely animpulse buy around them.
Amanda Knight (17:20):
I know, hey, they can wear you down.
Kids can wear you down fasterthan anyone else.
Scott Gordon (17:26):
Yeah, I got to say you're remarkably well composed
for someone who has childrenthose ages Sean.
Sean McLaughlin (17:31):
I agree.
Scott Gordon (17:31):
I cannot believe you were able to be as put
together during this podcast asyou have been.
Our second question is and thisis a good one.
I like this, amanda Other thanemail or texting, what app do
you use the most on your phone?
Sean McLaughlin (17:47):
Zillow.
When I travel, I always look atthe homes where I'm traveling.
Amanda Knight (17:52):
It's interesting, isn't it?
Yeah?
Scott Gordon (17:53):
Zillow people have a problem.
My wife's a Zillow person.
I'm like, what are you doing,looking at that $18 million
mansion, for what is going on?
Sean McLaughlin (18:04):
you doing?
Amanda Knight (18:04):
looking at that 18 million dollar mansion for
what is going on?
Yeah, yeah, I'm guilty of that.
It's fun to dream and hey, youmay be like I'm gonna retire
here someday.
I have to scope things out, youknow it's.
It's cold where you are, sean.
Sean McLaughlin (18:12):
You're in philly, right yeah, it's raining
and cold right now in thenortheast, so I will most likely
be headed back to denver umsoon wow, where it's nice and
toasty right it's nice andtoasty.
Right, it's nice and toastyexactly.
Amanda Knight (18:25):
Well, Sean, thank you so much for coming on and
talking with us about PFAS today.
We really appreciate you takingthe time.
Sean McLaughlin (18:31):
No, thank you.
Amanda Knight (18:32):
You can visit CRC Group's website or reach out to
your CRC broker for tailoredadvice and support.
Don't forget to follow us onLinkedIn for regular updates and
insights.
Thanks for tuning in to thePlacing you First podcast.
We'll see you next time.
Welcome back to the Placing you First podcast,
where we tackle today's hottesttopics in insurance.
I'm Amanda.
Scott Gordon (00:08):
And I'm Scott.
Today's episode tackles therising concern of PFAS, commonly
known as forever chemicals, andtheir far-reaching impact.
Amanda Knight (00:18):
From manufacturing to real estate.
Pfas are influencing liabilityregulations and even insurance
coverage.
Joining us to unpack this allis Sean McLaughlin, a CRC
environmental broker.
This is the Placing you Firstpodcast from CRC Group.
Scott Gordon (00:34):
This podcast features news and insights from
a vast knowledge base of over5,100 associates.
Amanda Knight (00:40):
Who write more than $35 billion in premium
annually.
Plus, we give you the latestinformation on what's happening
at CRC.
This is the Placing you.
Sean McLaughlin (00:49):
First podcast and now the hosts of the podcast
, Amanda Knight and Scott Gordon.
Amanda Knight (00:55):
Welcome Sean.
Thanks for having me today.
Scott Gordon (00:57):
Now, Sean, can you give us a quick primer on PFAS
and why they're called ForeverChemicals?
Amanda Knight (01:03):
It sounds so ominous.
Scott Gordon (01:04):
Yeah, it does.
Sean McLaughlin (01:06):
Sure, yeah, definitely in the spotlight
right now, and I mean I knowwe've seen some of the billion
dollar verdicts come out.
Dark water was in the news onthe big screen a few years back.
And then, from insuranceperspective, we're seeing
policies from all differentcoverage points include
exclusions.
Perspective, we're seeingpolicies from all different
(01:27):
coverage points includeexclusions.
We are fielding questions allday long on PFAS.
Why do I have a PFAS exclusionand how does it affect my client
?
A lot of nervous phone calls,but PFAS is really all around us
.
Pfas was developed, I think, inthe 30s, 40s as a polymer to
help resist heat, oils, stains,water, you name it on a bunch of
(01:51):
different products.
It was a DuPont product andfrankly, it works really well
and that's why we see it reallyall around us today.
It's historically been used ina ton of products, from your
Teflon pans to your Gore-Texjackets to your firefighting
(02:11):
retarded.
So the concern of our PFAS nowis that it's all around us.
I believe it's considered acarcinogen too.
So it's been linked to,obviously, medical concerns and
because it is all around us andin all the products that we use,
it's kind of an ongoing hotbutton issue of who is going to
(02:34):
pay to clean it up and who isresponsible from a liability
standpoint?
Amanda Knight (02:46):
around us right At this point, we know that it
is found in about almost 100%,if not 100%, of all humans over
the age of 12.
And recent research found it inlike 84% of 114 tested global
waterways.
So it's literally everywhere.
But you know, we typically havethought about it in recent
years as far as like, as likethe things you listed right the
(03:07):
pans, the firefighting gear andequipment, the firefighting foam
, carpet, things like that,stain resistant fabrics but I
think that now we're findingthat there are even more places
than that, more than most peoplerealize, and there are some new
places that they're starting tocome to light throughout the
production or distribution chain.
(03:28):
Is that right?
That is right?
Sean McLaughlin (03:30):
And we're.
You know the concern with itand because it was so widespread
over the years, and a bunch ofdifferent products.
And you're right, I think therewas a Netflix documentary or a
YouTube documentary years agowhich I think they only found a
very small segment of thepopulace in the world that were
not cross-contaminated with PFASin their bloodstream.
(03:53):
So it really is all around us.
Amanda Knight (03:56):
I think we've now seen lawsuits with PFAS tied to
baby wipes, fertilizers,property contamination, lots of
different places.
Sean McLaughlin (04:06):
Absolutely correct.
Yeah, I mean we're seeing itfrom a product standpoint.
We're having questions from acontracting standpoint.
You know whether or not youknow there's an exacerbation of
the existing PFAS in the soil orgroundwater because of our
construction activities.
You know, even from acontracting side, the PPE and
protective equipment that ourcontractors and our
(04:27):
subcontractors are utilizing.
What is the PFAS exposure there?
We are trying to adhere to arisk management approach by
recommending or not evenrecommending, requiring some PPE
equipment potentially.
And what is the PFAS exposurethere?
From a work comp standpoint orfrom an action over standpoint,
(04:49):
it's kind of far reaching.
We are seeing lenders inquireabout it as part of a real
estate transaction, privateequity groups.
We're seeing exclusions fromthe contracting standpoint,
manufacturing distribution.
We're seeing some of thestandardized markets include
absolute PFAS exclusions undertheir GL.
(05:10):
And I think that's the scarypart for most in the marketplace
and we'll probably touch onthat is we're starting to see
carriers no longer rely on thepollution exclusion.
They're treating it as similarhow they would have the asbestos
exclusion with a separate PFASexclusion.
They're treating it as similarhow they would have the asbestos
exclusion with a separate PFASexclusion.
Amanda Knight (05:27):
Now I know that with this far-reaching impact
come lawsuits.
Right, that's not a surprise toanybody, I know.
Back in June of 2023, you know,multinational industrial
conglomerate 3M reached a whatis considered by many a historic
settlement over PFAS withpublic water suppliers, because
(05:48):
PFAS was present in drinkingwater.
So under that settlement, thatcompany will pay $10.3 billion
yes, with a B to plaintiffs overa 13-year period.
And that lawsuit is one of thelargest to date involving PFAS
and I think it served, you know,sort of as a wake up call,
because it was everywhere in themedia.
(06:09):
It really sort of got everyonethinking about PFAS.
So when other industries or,you know, verticals look at
something like that, what doesthat mean for them?
Does that sort of set off alarmbells and cause them to take
any sort of specific action, orshould it?
Sean McLaughlin (06:28):
It should.
I think right now we are stillkind of in that gray area from a
litigation standpoint andadministrative standpoint as
well as, frankly, an insurancestandpoint standpoint.
As well as, frankly, aninsurance standpoint.
I think there was a study donea few years ago where Lloyd's
(06:48):
put out what is the economic andloss predictor for PFAS claims
and it was astronomical.
But we're kind of at acrossroads in some aspects and
still kind of in a gray area,because you see these large
billion dollar payouts and andfrankly you know, we are seeing
the claims from different stateepas uh impacting different
(07:13):
players, whether or not be thecontracting, real estate uh
transactions or or frankly, justlike redevelopment and
brownfield cleanup standards.
But why I say it's such a grayarea right now is it's not
universal.
There is a push to beimplemented a universal standard
(07:36):
for cleanup, but where we'reseeing a lot of the gray area is
who's impacted and where the Iguess the fines and penalties
from your state EPA or yourclaims for liability are
stemming from there's stilldifferent cleanup standards and
frankly, some of those cleanupstandards are, I would say, a
(07:59):
little onerous to some clientsfrom an economic standpoint as
well as just a feasibilitystandpoint.
Scott Gordon (08:06):
Yeah, and it's one thing to talk about big giants
like 3M and BP or whoever whocan drop billions of dollars on
these things and still be inbusiness, but what are the
ripple effects for, say, thesmall guys, small businesses?
Sean McLaughlin (08:20):
That's where it gets scary, because there's no
clear-cut answer.
You know I'd lie to you if Ifelt like, oh yeah, I can
absolutely get you PFAS coverageright now without you telling
me what you do.
Is PFAS coverage achievable inthe marketplace?
Yes and no.
It really depends on youroperations, the exposures, where
(08:44):
it's coming from.
There's a lot going into it.
It is not a slot-ratedinsurance.
Underwrite it.
Really.
You kind of have to understandthe exposures, understand what's
going on, understand where theclaims are coming from.
What's the potential to getbrought into one a claim or two.
The potential to get broughtinto one a claim or two.
(09:07):
The potential of the state, epaor, frankly, any administrative
authority in that jurisdiction,to re-brought you in from a
cleanup or a BIPD issue?
How, from an economicstandpoint, how can these small
when I say small, anybodyoutside of a billion dollar that
can handle a billion dollarsettlement on your balance sheet
(09:28):
?
I don't know.
I think there's a lot more outthere that cannot how can they
protect themselves?
And I think the biggest answerto that question is
understanding your exposure toPFAS, understanding how PFAS one
1 affects your business.
What is your exposure to it,whether or not it be from a real
(09:48):
estate transaction?
What is your historical use ofPFAS?
What is the historical PFAS ofthe sites around you From a
contracting exposure?
Again, we talk about PPE and wedo a lot of environmental
contractors and so is ourenvironmental contractor being
testing for PFAS?
Are they sampling?
(10:10):
You know we can get broughtinto suits that way that one
maybe our environmentalcontractor was not testing for
it.
Or you know the allegation thatwe didn't test the standards or
potential.
If we were a driller, you knowthe exacerbation or the movement
of it with soil and groundwater.
It's really there's not astraight answer to that.
It's knowing your exposure andhow PFAS is how you could be
(10:33):
potentially liable for it, which, if you don't even know what
PFAS is, that's a good startingpoint.
Amanda Knight (10:39):
Well, and we've got a couple articles out there
that can fill you in on all ofthat background.
If you visit crcgroupcom andclick on our tools and intel
button Now I've been around longenough to kind of be able to
make this connection in my mind,and I know, scott, you have too
.
Maybe, sean, people refer toPFAS as sort of the new asbestos
for insurers.
(11:00):
There may be some around whoare a little newer, younger than
we are.
Maybe they don't know what thatmeans, but you've been around a
little while.
You know what asbestos is.
What is that?
What do we mean when we say thenext asbestos, when we're
referring to to PFAS?
Is it just the extensive,far-reaching nature of it or the
(11:21):
severity or both?
Sean McLaughlin (11:23):
I think a little bit of both.
If you look at any propertyconstructed prior to 1970, even
a little after that, there's thepotential of asbestos
containing materials throughoutthat building.
So it is widespread in nature.
From that standpoint, and tothat same regard it's you know
(11:44):
what is the liability associatedwith it.
You know, in that case, withthe asbestos, the carriers to
this day still do not rely onthe pollution exclusion under
their GL.
So it's the fact that an ISOversion of the PFAS exclusion
was introduced.
Iso version of the PFASexclusion was introduced.
I wouldn't say it was a wake-upcall, but it was in some
(12:10):
aspects the first time agents orinsureds were even
understanding or hearing aboutPFAS.
So the fact that that wasintroduced just shows the
potential economic impact andconcern from carriers,
reinsurance partners, everyonereally.
Scott Gordon (12:23):
Yeah, I mean, I don't think anyone in this room
knew what a PFAS was, say 10years ago At least.
Sean McLaughlin (12:30):
I didn't.
I'll say, I've been doingenvironmental insurance for a
while now and I can tell you,when I started, I never heard of
PFAS.
Scott Gordon (12:39):
Are there any proactive steps that brokers and
insureds can take, and how doesa wholesale broker fit into the
process?
Sean McLaughlin (12:46):
I would say yes .
I mean it really does startwith understanding what your
exposure to PFAS is.
When I said coverage for PFASwas achievable in the
marketplace, it is and it isn't.
It really depends on theexposure and I think where the
key role of especiallyenvironmental wholesalers in
that space is understanding theexposure, understanding what's
(13:08):
achievable, setting realisticexpectations for clients, but
also not only knowing where togo.
You know, pfas coverage from acleanup standard might not be
achievable, but there are waysthat we can still potentially
get PFAS coverage, and I sayit's excessive indemnity
(13:31):
agreements in place,environmental indemnities and a
purchase and sale agreement that, in order to purchase a
property, we're doing fullremediation installing carbon
filters, cleaning out thewastewater treatment plants and
retention ponds.
So there's a lot of, I wouldsay, proactive approach that
(13:59):
we're seeing from both realestate transactions as well as
ongoing manufacturingdistribution ops.
For the contracting side, we'reseeing some markets that include
full PFAS exclusions oncontracting risk, whether it be
your GCs and trades or yourenvironmental contractors.
For the environmentalcontractors I kind of equate it
to adding an oil spill cleanupexclusion on an emergency
(14:21):
response contractor.
You can't exclude what they'rebeing paid to do.
That's the whole point ofinsurance, so making sure you're
protecting your client for whattheir true exposures and
liabilities are.
And it's asking those questions.
If we're insuring amanufacturer or distributor,
it's asking the question of youknow what's their exposure to
(14:42):
PFAS?
You know, who are theirsuppliers, what kind of
environmental, what kind ofindemnity agreements in place,
inquiring about their insurance.
You know, if we're beingsupplied products that contain
PFAS, we want to make sure thatwe are correctly identifying
who's responsible and where.
You know where ourresponsibility and liability
really lies.
It truly is a risk managementapproach to understanding PFAS
(15:05):
and how to protect our clientsor at least offer advice, more
than anything else.
Amanda Knight (15:12):
Well, we are nearing the end of our time
today, so I'm going to take astab at sort of wrapping up our
key message here and, sean, youcan chime in at the end if
there's anything that you wantto add.
Pfas exposure is pervasive andthe risks are growing.
Awareness, compliance and theright insurance policies and
relationships can make all thedifference.
(15:34):
Is there anything you'd add assort of our key takeaway for our
listeners today?
Sean McLaughlin (15:39):
No, I would just say that we're to the point
with PFAS, especially with theenvironmental markets, that we
are seeing a I would hate to usethe word softening, but we are
getting to a point wherecarriers are at least willing to
have the discussion around PFAS, whether or not that'd be a
full removal and exclusion, orat least carbacks, or at least
(16:01):
potentially, depending on therisk and exposure, having that
conversation around coverage forTPOS.
Scott Gordon (16:06):
Yes, like now that we know what it is and it's
killing all of us, let's dosomething.
That's a story old as time.
We've been using something forour whole lives and then we're
like, well, that was bad for us.
Well, anyway, okay, Sean, we'vemade it through the hard part
of the podcast.
Congratulations, we will besending you your little ribbon
in the mail.
(16:27):
But now we have a little funsection here that we like to
call Rapid Fire, where you justgive us the answer that's right
off the top of your head andhere we go.
First question is what was yourlast impulse buy and was it
worth it?
Oh, that's a good question.
Amanda Knight (16:45):
I mean, it is the holidays, the season of all
things, impulse buy.
Sean McLaughlin (16:49):
Yeah.
Scott Gordon (16:51):
And it didn't have to be for you.
Amanda Knight (16:52):
It could be like that impulse buy in the toy
aisle that kept your kid quietand calm for the 30 minutes you
really needed it to.
Sean McLaughlin (17:01):
Yeah, I have a five-year-old and a two-year-old
, so that was probably a safebet.
I tell my kids I'm not gettingthem toys, and then I get them a
toy.
I always tell people that Inegotiate and broker every day,
but when it comes to negotiatingwith my wife or kids, I'm awful
at it.
So, yeah, it's definitely animpulse buy around them.
Amanda Knight (17:20):
I know, hey, they can wear you down.
Kids can wear you down fasterthan anyone else.
Scott Gordon (17:26):
Yeah, I got to say you're remarkably well composed
for someone who has childrenthose ages Sean.
Sean McLaughlin (17:31):
I agree.
Scott Gordon (17:31):
I cannot believe you were able to be as put
together during this podcast asyou have been.
Our second question is and thisis a good one.
I like this, amanda Other thanemail or texting, what app do
you use the most on your phone?
Sean McLaughlin (17:47):
Zillow.
When I travel, I always look atthe homes where I'm traveling.
Amanda Knight (17:52):
It's interesting, isn't it?
Yeah?
Scott Gordon (17:53):
Zillow people have a problem.
My wife's a Zillow person.
I'm like, what are you doing,looking at that $18 million
mansion, for what is going on?
Sean McLaughlin (18:04):
you doing?
Amanda Knight (18:04):
looking at that 18 million dollar mansion for
what is going on?
Yeah, yeah, I'm guilty of that.
It's fun to dream and hey, youmay be like I'm gonna retire
here someday.
I have to scope things out, youknow it's.
It's cold where you are, sean.
Sean McLaughlin (18:12):
You're in philly, right yeah, it's raining
and cold right now in thenortheast, so I will most likely
be headed back to denver umsoon wow, where it's nice and
toasty right it's nice andtoasty.
Right, it's nice and toastyexactly.
Amanda Knight (18:25):
Well, Sean, thank you so much for coming on and
talking with us about PFAS today.
We really appreciate you takingthe time.
Sean McLaughlin (18:31):
No, thank you.
Amanda Knight (18:32):
You can visit CRC Group's website or reach out to
your CRC broker for tailoredadvice and support.
Don't forget to follow us onLinkedIn for regular updates and
insights.
Thanks for tuning in to thePlacing you First podcast.
We'll see you next time.
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