Environmental Liability
contamination could trigger regulatory action or distress. Regulators are also designating PFAS substances as hazardous under federal law, expanding the scope of potential liability. At the state level, regulators are developing new restrictions and reporting requirements at an accelerated pace. The combination of stricter regulations and limited insurance coverage has created a challenging environment for businesses that may not fully understand their exposure.
The financial consequences of this coverage gap could be substantial. Businesses could face significant legal costs associated with defending claims related to PFAS exposure, even if those claims ultimately lack merit. Environmental cleanup and remediation costs can quickly escalate, particularly when groundwater contamination is involved. In addition, regulatory actions can lead to operational disruptions, fines and reputational damage that can undermine long-term business relationships. PFAS-related claims also often involve latent exposure. That means that liability could arise years after the initial event. This possibility further complicates risk management and financial planning. Without proper awareness and proactive measures, many of these costs are uninsured. The insurance industry believes PFAS could ultimately become the next asbestos.
In this environment, the role of the broker becomes more important than ever. A transactional approach focused solely on obtaining coverage is no longer sufficient. Brokers must take a more consultative role, developing a deeper understanding of their clients’ operations and identifying exposures that aren’ t immediately visible. This includes evaluating how PFAS may enter a client’ s processes, whether through chemicals, materials or wastewater systems, and understanding how those exposures translate into potential claims. It also requires asking more detailed underwriting questions, carefully reviewing policy language, and clearly communicating coverage limitations to clients. The value of a broker is no longer defined solely by access to markets, but by the ability to anticipate and manage emerging risks.
Steps Operators Can Take
Commercial laundry operators can take several steps to reduce their exposure. Evaluating chemical inputs and working with suppliers to determine the potential presence of PFAS compounds is an important starting point. Where feasible, transitioning to PFAS-free alternatives can help reduce long-term liability. Reviewing existing insurance policies to identify exclusions and gaps is critical, as is exploring specialized coverage options where available. Operational improvements, such as enhanced spill-containment systems and wastewater controls, can also mitigate risk. Employee training on proper chemical handling and environmental awareness can further reduce the likelihood of incidents. Finally, staying informed on regulatory developments allows businesses to adapt proactively rather than reactively.
Looking ahead, PFAS-related litigation and regulatory enforcement are expected to increase significantly. As claims develop, disputes over insurance coverage are likely to follow, particularly regarding older policies issued before the introduction of PFAS-specific exclusions. While some policyholders may attempt to access coverage through legacy policies or legal challenges, relying on litigation isn’ t a sustainable strategy. The insurance market is unlikely to expand coverage for PFAS exposures in the near term. Instead, businesses should expect continued tightening of underwriting standards and scrutiny from carriers.
PFAS represents a fundamental shift in environmental risk, one that’ s already reshaping both the regulatory landscape and the insurance marketplace. For the commercial laundry industry, the exposure is real, operational and often underestimated. With exclusions now embedded across most liability policies, many businesses are operating with significant uninsured risk. In this environment, understanding your exposure risks and working with a knowledgeable broker is essential. The ability to identify, explain and manage PFAS risk is no longer a differentiator. It is a necessity. TS
MICHAEL RAYO is risk management specialist for Haylor, Freyer & Coon, an Alera Group Company. Contact him at 315. 956. 4104 or mrayo @ haylor. com.
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26 Textile Services • May 2026