UK Trends and Developments Contributed by: Daniel Robin and Chloe Franklin, SDV Fenchurch
The scale of the potential exposure has become appar- ent in the United States. In 2023, 3M (PFAS Manufac- turer) agreed settlements worth up to USD10.3 billion in relation to claims concerning PFAS contamination of drinking water supplies. DuPont, Chemours and Corteva subsequently entered further settlements exceeding USD1 billion. Although litigation in the United Kingdom remains at a comparatively early stage, the issue is increasingly attracting regulatory and commercial attention. Air- ports, military facilities, manufacturers, utilities and infrastructure operators may all face scrutiny concern- ing historic or ongoing PFAS use. For insurers, PFAS presents challenges familiar from previous long-tail liability claims such as asbestos. Key questions include: • When did the alleged contamination occur? • Which policy year is relevant? • How should liability be allocated between succes- sive insurers? • Do pollution exclusions apply? • Can multiple claims be aggregated? These issues have the potential to generate substan- tial and complex coverage disputes. The long latency periods associated with environmental contamination can make it difficult to establish precisely when dam- age occurred or which policies should respond. Many commentators now regard PFAS as one of the most significant emerging liability risks facing the global insurance market. While the scale of future UK litigation remains uncertain, businesses operating in sectors where PFAS has historically been used should pay close attention to developments in this area. Cyber warfare and systemic cyber risk Cyber risk remains one of the fastest-evolving areas of the insurance market. While ransomware and data breaches continue to generate significant claims, recent events have demonstrated that some of the largest losses can arise not from malicious attacks, but from failures affecting critical technology infra-
structure relied upon by thousands of organisations simultaneously. A notable example was the global IT outage triggered by CrowdStrike’s software update in July 2024. The defective update caused widespread disruption to Microsoft Windows systems across multiple jurisdic- tions, affecting airlines, financial institutions, health- care providers, retailers and government services. Flights were grounded worldwide, hospitals experi- enced operational disruption and businesses across numerous sectors suffered losses arising from inter- rupted operations. The incident highlighted the growing risk within the digital economy. Many businesses that had not them- selves suffered a cyber-attack nevertheless expe- rienced significant losses because they relied upon software or services provided by a common supplier. For insurers and policyholders alike, the event raised important questions concerning contingent business interruption cover, supplier dependency, operational resilience and the extent to which traditional cyber policies are designed to respond to widespread sys- temic failures. The insurance implications of systemic cyber events have been an area of concern for some time. The 2017 NotPetya malware attack remains one of the most sig- nificant examples of a cyber event generating global losses, causing disruption to multinational businesses including Maersk, Merck and FedEx. The resulting litigation, particularly Merck & Co v ACE American Insurance Company , focused on whether losses aris- ing from a cyber-attack attributed to Russia could be excluded under a traditional war exclusion. Although that decision was not determined under English law, it had significant influence across inter- national insurance markets and contributed to the introduction of more specific cyber war exclusions, including requirements introduced by Lloyd’s of Lon- don for standalone cyber policies. Together, CrowdStrike and NotPetya demonstrate two increasingly important realities. Firstly, cyber losses can arise from technology failures as readily as mali- cious attacks. Secondly, a single event can affect
262 I NSURANCE L I T IGATI O N 2026
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