What is it, and why is it a problem?

In simplified terms nanoscience and nanotechnology are the study and application of extremely small things and can be used across many different science fields. The technology part refers to a wide range of substances manufactured at an atomic or molecular level. And to give you some indication of their size if a marble were a nanometer, then one meter would be the size of the Earth!₁ Because of the extremely small size of such materials, they have unique properties that, in many cases are not yet understood, but can be used for a huge spectrum of products.

Although nanotechnology is exciting and presents many possibilities, there are also many undefined and unsubstantiated risks associated with it.

Risk management

Unlike troublesome substances that pose risk such as asbestos, nanotechnology is not only wide reaching but it affects many different products and industries. Worryingly, a lot of manufacturers have no idea if their product contains or is produced using nanotechnology. It is also probable that each nanoparticle could represent a different degree of risk. Its because of this uncertainty companies should and need to be protected should problems arise down the line. A claimant is likely to argue that the company knew there were potential risks but did nothing about them.

How can you protect your company?

The best way to protect your company is to be as proactive as possible in anticipating where issues may arise. You may wish to consider requesting that your suppliers or even sub-suppliers disclose if nanotechnology has been used in the production of what they provide to your company. It is important that you share this information with your insurance broker/provider to ensure you have the correct cover and to prevent claims of nondisclosure. Given the vast breadth of nanotechnology, it may be that you require several types of cover to be in place.

Environmental liability

It is essential that companies with environmental risks should also seek environment liability cover. The risks surrounding nanoparticles are relatively unknown but it is thought that they may be released into the environment during production, storage, transport, product use or disposal. What’s more concerning is that these accidental releases into the environment could go undetected. Due to the lack of data on what risks nanoparticles pose to the environment it’s important for companies to carry liability cover to offset risks. By discussing potential risks with your insurer you can help ensure that your liability policies cover claims associated with nanotechnology.

Business and property

If your business is engaged in nanotechnology it will need to have sufficient property, business interruption and public and employers’ liability cover in place. Any employees involved in the research, development or production of nanoparticles are at risk for workplace injury or illness resulting from exposure. It’s this exposure that could lead to claims involving bodily injury, not to mention negligence due to unsafe work environment and inadequate worker protection, amongst others. Due to the reactivity of nanoparticles property claims could also be an issue due to accidents.

What other cover might you need?

Due to the uncertainty of what could potentially go wrong with products manufactured using nanotechnology one of the most obvious covers required would be product liability, with a lot of scope for claims to arise. Consequently it is also worth considering products recall cover given that a product liability claim could result in massive product recalls. In any areas of technology it is usually a wise idea to cover your Intellectual Property especially given the unique nature of nanotechnology, and the disputes that may arise.

As with most companies your exposure to claims requires you to keep the company protected; and with the uncertain future of nanotechnology, Professional Indemnity cover as well as Directors and Officers cover should also be part of your insurance package.

Our advice is to stay informed about the ways nanotechnology is used in your own company, and be open with your broker and insurers regarding nanotechnology use and make sure to have appropriate covers in place to combat potential claims.

₁ http://www.nano.gov/nanotech-101/what/definition
Source: Zywave

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