The water industry is facing a growing wave of scrutiny — both scientific and legal — as emerging contaminants continue to surface in water supplies across the country. From chemicals to pharmaceutical runoff, these newly acknowledged risks are triggering tighter regulations, consumer lawsuits, and major shifts in insurance coverage expectations. For insurance agents, staying ahead of these trends is key to advising clients and tailoring the right water treatment insurance policies for their evolving needs.
What Are Emerging Contaminants?
Emerging contaminants are substances that have only recently been detected in water systems and have yet to be fully regulated. They’re not new, but awareness of their risks is. Examples include:
- PFAS (perfluoroalkyl and polyfluoroalkyl substances): Also known as “forever chemicals,” PFAS have been linked to cancer and immune system issues. Recent data shows over 158 million Americans are exposed to them in their tap water.
- Pharmaceutical residues: Antibiotics, antidepressants, and hormones are entering water systems through improper disposal and wastewater.
- Endocrine disruptors: Found in everything from industrial runoff to personal care products, these chemicals enter waterways through wastewater discharge and agricultural runoff. Once in the water supply, they can interfere with hormonal systems in both humans and aquatic life.
- Microplastics: These tiny plastic particles are now present in oceans, rivers, and even treated drinking water. Up to 83% of tap water worldwide contains microplastics, sparking questions about long-term human health impacts.
Even in the absence of strict federal regulations, public concern and the threat of litigation are pushing water treatment operations — and their insurers — into new territory.
Rising Legal and Regulatory Risks
While regulatory frameworks are still catching up, state-level mandates and EPA advisories are already changing how water treatment facilities must operate. For example, many states are setting their own PFAS limits, often stricter than federal guidelines. Meanwhile, lawsuits over chemical exposure and contamination are becoming more frequent, targeting everything from municipalities to water treatment contractors.
For insurance agents, this legal pressure is a flashing warning sign. Clients who once relied on standard general liability coverage may now be exposed to costly gaps in pollution or professional liability. Agents must be able to identify these blind spots and advocate for comprehensive protection.
Impacts on Water Treatment Insurance Programs
As new contaminants enter the spotlight, so does the need for insurance programs that address them head-on. Traditional exclusions for pollutants like mold, bacteria, and chemical runoff are no longer tenable.
Modern water treatment insurance programs must include:
- Pollution liability that covers both sudden and gradual contamination events
- Products and completed operations liability for claims stemming from treated water
- Professional liability that protects consultants and engineers advising on water quality solutions
At WaterColor Management, we offer tailored underwriting that doesn’t shy away from complex risks like Legionella, lead, or PFAS.
Adapting Water Treatment Programs
Agents should view this shift as an opportunity to strengthen their value to clients. That starts with re-evaluating your current water treatment program strategy:
- Choose carriers that offer occurrence-form pollution coverage, not just claims-made.
- Ensure mold and bacteria aren’t excluded in key liability policies.
- Look for partners offering contract reviews and loss control support to prevent claims before they happen.
WaterColor Management works hand-in-hand with agents to navigate this terrain — helping review service agreements and implement safeguards that align with regulatory and operational best practices.
A New Era of Specialized Coverage
We’re no longer just insuring water systems — we’re protecting public health, environmental integrity, and the reputations of businesses at the center of this evolving crisis. Agents need a partner who understands the nuances of emerging risks and how to insure against them.
WaterColor Management brings over three decades of water industry expertise and a forward-thinking approach to policy design. From unlimited defense cost coverage to pollution liability, we equip agents with the tools they need to thrive in this new era of water risk.
Ready to protect your clients against tomorrow’s water challenges? Reach out to us for a quote today.
About WaterColor Management
WaterColor Management has insured the water industry for over 30 years. Our policies include unlimited defense cost coverage in the event of a lawsuit against you. Call us at (855) 929-0824 or email info@watercolormanagement.com for a quick quote for your Water Business Professional, Products/Completed operations, Pollution, and General Liability Insurance.