What’s the New PFAS Ruling Got to Do with Me?
By Lydia Zaharia and Susanne Deegan, Marsh McLennan Agency
The Background:
On April 10, 2024, the EPA announced the final National Primary Drinking Water Regulation (NPDWR) for five Per- and Polyfluoroalkyl Substances (PFAS), and mixtures of two or more, given the suspected environmental and health impact of these chemicals. The following week, the EPA also designated two types of PFAS, Perfluorooctanoic Acid (PFOA) and Perfluorooctane sulfonic acid (PFOS), as hazardous substances under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or Superfund), the law allowing the EPA to regulate and enforce the cleanup of hazardous substances. Although we have seen similar water enforcement for PFAS at the state level, these rulings, along with another finalized in November of 2023, mark the first official steps towards regulation of PFAS taken by the EPA.
While the majority of concern is about the levels of PFAS in drinking water, construction companies need to be aware of how it concerns them, too.
How do the new rules impact the construction industry?
Construction companies, while typically not the responsible party for products containing PFAS, do have potential risk associated with PFAS through their supply chain. These risks include:
- Inadvertent disturbance and exacerbation of existing contamination at jobsites
- Contamination of their own locations when bringing back materials from contaminated projects
- Recommending, supplying and installing products that contain PFAS
- Exposure to hazardous materials for employees and subcontractors
- Assuming liability for PFAS by contract
- Resulting claims or litigation from their participation in projects.
Additionally, designating PFOS and PFOA as hazardous substances under CERCLA could create a unique problem for contractors. Under CERCLA, “responsible parties” can be current or previous owners and operators of a facility where hazardous substances were located, but also transporters or parties that arranged for the transportation and disposal of the hazardous substance. Contractors could have difficulty finding a facility willing to take construction and demolition waste, and be at risk for litigation and participation in the cleanup of these facilities in the future.
Many states have issued restrictions for PFAS across a wide range of products, banning the use or sale of those products within their states. Project owners and contractors should determine if products needed for a project will contain PFAS and what, if any, regulation would apply and work with suppliers to provide similar non-PFAS containing projects where possible. For remediation projects, a safety and disposal plan for working with contaminated materials should be established and followed by all parties.
PFAS can be found in the following construction materials:
- Roofing materials
- Weather proofing membranes
- Insulation
- Metal coatings
- Paints Wood stains and lacquers
- Sealants
- As additives in carpet and flooring materials to impart stain resistance
- Other fabric materials
- Caulk and other adhesives
- Cables and wires
- Solar panels
- Seismic Damping Systems
- Artificial Turf
What steps can Contractor’s take to mitigate risk?
Water providers will look to contractors and consultants to design and construct systems that can meet the extremely low Maximum Contaminant Level (MCL) of 4ppt for some PFAS compounds. While the EPA has advised the MCL’s established by this ruling should be attainable, companies should carefully review the contracts for these projects with their general counsel and avoid providing warranties or assuming liability when installing new systems where possible.
Contract review and negotiation will become increasingly important as companies work to comply with these new regulations and reduce responsibility for PFAS. Contractors should review contracts for any provisions that could apply to PFAS with their counsel and push back where they are made responsible. Avoid assuming liability for materials transported or disposed of as part of operations by contract.
Conduct risk assessments of existing locations prior to starting work, especially for jobs at airports, landfills, manufacturers, brownfield or legacy contamination sites, and water-related locations. Establish an identified baseline for existing contamination and confirm the project owner retains liability of that contamination under contract. Avoid taking ownership of materials that could be contaminated through vendor confirmation that materials are PFAS free. Testing may be required for regulated PFAS and other contaminants prior to introducing a material at a contractor’s location.
Introduce and enforce safe handling procedures for potential materials that could contain PFAS. Provide warning to employees, subcontractors, project owners, and end users of locations associated with PFAS materials.
Project owners, contractors and consultants should be having conversations with their insurers or brokers about current and future risk created by these rulings. It is important that they discuss any new exclusions or sublimits in their coverage for any of these chemicals they may have at any point in their operations. If coverage is not available in the standard liability policies, coverage may be available in pollution and professional policies for all contracting types and projects.
Why does this new ruling matter? What’s at stake?
While regulation and litigation to date has focused on the major manufacturers of PFAS, the precedent is changing. Companies that work with, dispose of, or have employees that are regularly exposed to PFAS are at risk for bodily injury, property damage, and cleanup claims and litigation. Contractors are no exception and should be taking steps to protect themselves from future risk.
About the Authors:
Lydia Zaharia is environmental marketing director at Marsh McLennan Agency. She can be reached at Lydia.Zaharia@marshmma.com.
Susanne Deegan is senior consultant of environmental at Marsh McLennan Agency. She can be reached at Susanne.Deegan@marshmma.com
