Insurance Carriers Have Concerns about Insuring Nanotechnology

It’s early in the game of assessing the risks

The full potential of nanotechnology is yet to be seen. It’s being suppressed by insurance carriers unwilling to insure the innovative products created by using this technology.

We received a call from a company about spray-on insulation using nanotechnology they developed.  They claimed the spray-on insulation resulted in a dramatic reduction in energy costs. I can’t remember the exact details, but something like 1/8” of the their insulation would replace 12” of normal insulation. That’s pretty dramatic!

Sadly, we found no carriers willing to provide them with a Product liability policy.  This puzzled us. We reassured the product liability underwriters that workers wear HAZMAT gear that prevents inhalation of any nanoparticles.

The logic behind the decision

Only after reading Nanotechnology – Small Matter, Many Unknowns did I understand their concern was for the workers and the public. The nanoparticles could potentially be small enough to attach to dust and  be inhaled anyone.  It seems the insurance carriers’ concern is that nanoparticles are the next asbestos of insurance claims.

Safety and looking ahead

The concerns by consumer advocates, insurance companies and others about nanoparticles’ potential risks resulted in the National Nanotechnology Initiative for safety research.  However, according to the National Research Council, NNI’s plan excludes goals to help ensure nano development and safe use. It fails to provide a clear understanding of nano risks and where the technology should be in 10 years.

The NRC called for a new plan to include research by universities as well as industry, consumer and environment research groups.

Looking ahead

The potential for nanotechnology seems limitless. But until entrepreneurs and investors can be fully insured and know that their assets are protected, the business of nanotechnology will creep at a snail’s pace.  And Product Liability insurance carriers will remain cautious until they have reliable research data on the safety of nanotechnology