Much discussion of casualty catastrophe is consumed with talk of the “next asbestos,” the $100 billion insurance loss caused by a ubiquitous mineral used for insulation and other products that is now known to cause cancer. The asbestos example is important to understand because it created precedents that tend to reappear in mass litigation, but it is only one example of a casualty catastrophe.

Executive Summary

The unique properties of the chemical bond that make PFAS compounds commercially useful also render them resistant to degradation in the environment, earning them the nickname "forever chemicals." Here, scientists from Praedicat examine whether PFAS is the next MTBE, explaining that there are more ingredients for drinking water litigation and potential liability insurance claims around PFAS than there were for MTBE—including scientific evidence linking PFAS to infertility, cancer, obesity and developmental issues; growing public awareness; exposure to dozens of industries; and polluting activities that date back 70 years.

Another important example is MTBE (methyl tert-butyl ether), and the precedent of MTBE may be more important now than ever.

For decades, drinking water in the United States was the envy of much of the world—plentiful and clean. However, the use of MTBE as a gasoline additive in the 1980s and 1990s led to its contaminating drinking water supplies around the country from a combination of gasoline spills and leaky underground storage tanks. It also led to mass litigation in which municipal water suppliers sued gas stations and oil companies to remove MTBE from the soil and groundwater. The net result was billions of dollars in cleanup costs, almost entirely borne by the oil and gas industry.

Casualty catastrophe events don’t repeat themselves. They can’t. MTBE has already been removed from the water, and asbestos is no longer added to insulation. Instead, casualty catastrophes tend to fundamentally alter the legal and cultural landscape, making the next one a variation on the theme because of new legal precedents established during the previous event. Past casualty cat events create templates for future events.

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