PFAS may have entered the public consciousness as the “boogeyman behind the curtain,” Canaan Crouch said, but in the insurance market, that early panic gave way to calculation.
“When it first came out to the environmental insurance industry, it was kind of like, ‘Hey, it’s coming, get ready, it’s coming,’” said Crouch (pictured above). Carriers quickly assessed their books to see whether they insured companies still using PFAS or properties likely contaminated. Once they understood the exposure, some began underwriting the risk directly, taking a case-by-case approach. Others chose a “draconian” route of blanket exclusions, unwilling to risk unintended losses.
The stance is shifting, he said. Underwriters have softened their aversion as technology emerges with “a certain degree of efficacy” in treating contamination once thought untouchable. “You are seeing the market respond in a productive way towards PFAS,” he said.
That pragmatic recalibration reflects how Crouch views environmental risk more broadly. He pointed to the MTBE episode – an oxygenate added to fuel in the name of cleaner air that ended up contaminating groundwater. “While they cleaned up the air, what they did is… they contaminated groundwater,” he said. Removing it required burning more fuel to pump it out, a cycle he traced to “hyper focus on one thing” without a holistic view.
“I am a conservationist and I am an environmentalist, but I would like to think that I’m a pragmatic environmental advocate,” he said. “Sometimes people don’t consider the multi-faceted approach to pursuing a green initiative.”
In his view, ESG mandates had “not really much effect” on environmental liability coverage. The reason was structural – policies are written to cover bodily injury, property damage, and cleanup tied to pollution conditions, insuring to statutes like RCRA and CERCLA. “Without a target or a goal to get to, there’s really no way to… create a policy and an industry,” he said.
Crouch pushed back on the idea of new friction between real estate development and environmental remediation. “I would disagree slightly. I don’t think there’s an increasing tension… I think it’s always been there,” he said.
He has seen both sides – first as a geologist and consultant assessing and cleaning contaminated sites, then as an underwriter insuring redevelopment. In the mid-2000s, he said, the pace was driven by California’s industrial and military legacy, which left prime waterfront land needing cleanup. Major projects like Hunters Point and Yerba Buena Island drew significant investment.
Today, expensive capital has slowed the market. “There’s just less people pursuing purchase, clean up and redevelopment of properties than there was in the past,” he said. Many large former military sites have already been addressed, and with higher financing costs, the churn of property turnover has eased.
On climate-related financial disclosures and global ESG standards, Crouch described the marketplace as “robust and ready” for site pollution coverage. Capacity is increasing, and with demand tempered by the cost of capital, prices have flattened or fallen.
“What we’ve seen… is there has been a significant softening of that marketplace,” he said. “I think it’s a continuing trend until we have another price signal,” such as a major loss event forcing underwriters to tighten terms.
Stable reinsurance has supported this trend, he added, noting that unless a shock event hits, further softening is likely. For him, the thread running through PFAS, brownfields, and climate disclosures is the same – coverage follows statute, and underwriting follows measurable, enforceable cleanup goals.
“Sometimes people don’t consider the multi-faceted approach to pursuing a green initiative,” he said. In his experience, overlooking that complexity is where both environmental policy and insurance face their greatest risks.
