“Toxic torts,” which are lawsuits alleging damage to human health or the environment caused by specific substances, are increasingly common in the United States. They can cost defendants hundreds of millions, even billions of dollars. But such risks are no longer a U.S.-only concern. With a recent settlement between the Belgian government and 3M Co. of St. Paul, Minn., the risk of big-money damages arising from past and present use of noxious substances has now reached Europe.

The case involves so-called “forever chemicals,” so named because of their very long persistence in the environment—including in bodies. Belgium reached a settlement with 3M in which they will pay $581 million in remediation costs, compensation and fines as a result of its historical contamination of the ground around Zwijndrecht. That’s where, until 2002, 3M manufactured the forever chemical known as PFOS. It was found in the nearby soil in 2018, and subsequently in the bloodstreams of local residents in very high concentrations.

For decades PFOS, properly called perfluorooctane sulfonic acid, has been widely used to make textiles and paper products resistant to both oil and water. Commercial and consumer applications range from firefighting foams to denture cleaners. Unfortunately, PFOS is toxic, persists in the environment, and bioaccumulates in people and animals. PFOS is no longer manufactured in the U.S. but is still used in a few applications. It is imported in its pure state for a limited number of uses, as well as arriving stateside as a component of hundreds of manufactured products.

Scientists have been researching the health effects of PFOS and similar chemicals for many years. Their findings, combined with the extremely long life of the substances, led them to worry they will pose a risk to human health and the environment for decades to come. In response to such concerns, the U.S. Environmental Protection Agency issued two “Significant New Use Rules” in 2000 that require companies to inform them before they manufacture or import identified PFOS-related substances. At the same time, 3M announced that it will phase out production voluntarily. In 2009 the Stockholm Convention on Persistent Organic Pollutants added PFOS as a restricted substance.

The conclusion of scientific research published since 2016 has been almost unanimous: PFOS causes direct injury to organs of the endocrine system and/or causes deviations from normal endocrine metabolism. That can lead to myriad deleterious conditions including cancer and systemic metabolic disease.

For insurers, PFOS—along with other PFAS chemicals like perfluorooctanoic acid (PFOA) and thousands of other fluorinated chemicals—is a looming liability disaster. Commercial carriers may face worrying aggregations. Fortunately, though, the litigation risk so far has been limited. Mass torts alleging bodily injury by everyone exposed to Scotchgard-treated carpets or Teflon frying pans have not yet occurred for two reasons. First, even with the current state of the science showing that PFAS can cause bodily injury generally, it remains quite difficult to prove that in a particular individual. Second, scientific evidence directly linking bodily injuries to specific PFAS-containing products is not significant (not yet, at least).

Showing that defendants contaminated the water has been the most successful legal strategy. In February 2017, Dupont and its spin-off company Chemours settled more than 3,000 lawsuits brought by Ohio and West Virginia residents who claimed they were sickened by drinking water contaminated with PFOA, which is used, among other things, to make Teflon.

Drinking-water suppliers across the U.S. have filed lawsuits against manufacturers and users of PFOS. Their goal is to recover the costs of removing the chemical from the water supply. In 2018, for example, the state of Minnesota settled with 3M for $850 million to clean up water contaminated with PFOS. 3M’s settlement in Belgium indicates that Europe is making similar moves to get land and water cleaned up.

Scientists have been studying PFAS exposure and the resulting bodily injury to humans which increases the likelihood of litigation. Higher concentrations of PFAS in blood have been associated with a wide spectrum of endocrine system diseases including Type II diabetes, thyroid disorders, altered body mass index and metabolic syndrome.

Researchers have also found exposure to PFAS during pregnancy to be harmful. Maternal blood levels which are high PFAS have been linked to miscarriage and pre-term birth of babies. The detrimental effect of PFAS on reproduction is also observed in males with lower sperm count and altered sperm morphology. Recent studies have shown PFAS may be responsible for a weakened immune system in humans. Persistent infections have been associated with PFAS as well as contributing to lower response from vaccines including diphtheria, hepatitis, influenza, rubella and tetanus.

That means that while PFAS matters heat up in Europe, they could get worse in the U.S. The EPA under the Biden administration is planning to set a maximum level for PFAS in drinking water this fall. That would force utilities nationwide to install expensive treatment systems. We estimate they could seek to recover $164 billion in costs if the standard is set at 70 parts per trillion, and $410 billion at 7 ppt. And that’s just for remediation; bodily injury lawsuits could result in damages totaling billions more.

Some insurers are adopting PFAS exclusions, and many others no doubt wish they had done so years ago, since PFAS have been used since the 1940s. In Europe, Belgium’s enormous 3M settlement is almost certain to prompt additional exclusions. This could lead to coverage issues, even for some companies for whom litigation may only be a remote but worrisome risk. We hope this could encourage more forward-looking carriers to grasp the opportunity to write back PFAS coverage on a named-peril basis for downstream users who cannot be clearly causally linked to human illness, or who use PFAS in ways less likely to lead to human exposure. Either way, insurers should carefully manage aggregations of any innovative coverages as Europe’s PFAS-contaminated-water floodgates have opened.