What Is the No. 1 Emerging Litigation Risk? ‘Forever Chemicals,’ Says Praedicat

September 17, 2020 by

The top emerging litigation risk identified for the year ahead is PFAS, the so-called “forever chemicals” used in a wide variety of products such as Teflon, Scotchgard, food containers, firefighting foam and ski wax, said the co-founders of Praedicat, the Los Angeles-based liability risk analytics company.

The root of problem is that PFAS—or per- and poly-fluoroalkyl substances—are “everywhere and forever,” said Adam Grossman, Praedicat’s VP of emerging risk. He and Robert Reville, the company’s CEO, spoke in a video for Carrier Management’s new ExecTalk series that’s embedded in this article.

These chemicals don’t break down in water or in soil, he said. “They are really, really hard to degrade, which is why they are built. They’re built to withstand a lot of abuse.”

Because PFAS is found in ski wax, it’s even been found in the Alps, said Grossman.

Grossman noted that litigation has started primarily around the cleaning up of PFAS from contaminated water supplies as well as bodily injury lawsuits from firefighters who claim they have been injured by the chemicals, which they were exposed to when fighting fires or training.

Other topics of discussion in this ExecTalk video are:

  • The possibilities for litigation connected to “take-home COVID-19,” which occurs when front-line workers are exposed to COVID-19 and bring the virus home to their family members.
  • Trends in 5G litigation.
  • The risk of government-driven opioid-style litigation over sugar and processed food and how that might be heightened during the COVID-19 pandemic.
  • The drivers of social inflation.

If increased mass litigation and increased aggregation are core characteristics of social inflation, “it seems to me, there’s a big opportunity for the reinsurance industry to potentially innovate and develop new products to help insurers to manage this increased risk of aggregation,” said Reville.

He cited as examples the development of new types of cross-line, clash products, as well as new types of named-peril reinsurance products. While 2021 may be the year when PFAS, 5G or COVID-19 risks emerge, perhaps it also will be the year when “there is new innovation in clash reinsurance,” Reville noted.

Praedicat provides a regular series of exclusive articles for Insurance Journal’s sister publication, Carrier Management, which aim to alert the casualty insurance industry to emerging litigation risks. Some of these articles are included here:

This article was first published in the “Big Re,” Carrier Management’s reinsurance hub for complete reinsurance coverage. Launched during the week of what would have been the Reinsurance Rendez-Vous de Septembre, this special page aims to provide complete reinsurance coverage of, by and for reinsurance professionals and buyers — including news, features, interviews, commentaries, whitepapers, videos, webinars and more.