Nanotechnology and Insurance

There are many fields of emerging risk in technology but few are as fascinating as nanotechnology. Nanotechnology involves materials which are less than 1 billionth of a meter long. A human hair is about 800 times thicker than the average nanomaterial. It’s not too long ago that nanotechnology was really the stuff of science fiction. Yet, in the last decade more than 1,000 products have come to market using nanotechnology. That means that there are new opportunities for insurers and new risks.

Insurance and Nanotechnology – The Opportunities

Nanotechnology offers opportunity for risk reduction in many industries. A nanotech sensor could be used in construction to monitor the stress on materials; this would enable accurate detection of the collapse of a structure – making insuring that structure less of a risky proposition. The risks of having to deal with death or injury would be significantly reduced.

Then there are the medical applications of nanotech with the potential to cheaply and easily treat a wide range of conditions. Health insurers will be pleased to think about the impact on claims of these solutions.

In the clothing industry, nanotech can be used to increase flame retardance, for example and that means safer working practices in many industries.

Insurance and Nanotechnology – The New Risks

There are substantial new risks involved in nanotechnology and the number 1 risk is not the rise of nanotechnology to consume the earth, as speculative science-fiction would have it, but rather the risks of inhalation damage.

Nanoparticles are tiny. They’re going to be very easy to inhale. This applies nearly equally to those involved in their manufacture and to those exposed to them in their day-to-day use. Of course, there’s some testing of nanomaterials prior to their release into the commercial market but who’s to say how long testing should last or what it should consist of? Unfortunately, there’s no single body regulating nanotechnology nor is there a universal agreement on what constitutes “inhalation risk”.

Insurers are going to need to exercise extreme caution here; imagine the consequences to the bottom line if a nanotech product were to become, as has been theorized; “the next asbestos”. Nanotechnology in the food chain in fact grows this risk exponentially; asbestos wasn’t anywhere near as prevalent as food is.

It’s possible that nanotech may have major environmental impacts. Toxicology and environmental reactions are poorly understood for the new technology.

There are also potentially unforeseen effects to take into account; nanotechnology is new – we may not even have conceived of some of the problems it may create in the future.

Specialist Insurance for Nanotechnology?

Nanotech almost certainly requires specialist insurance. Yet, most insurers are completely unprepared to deliver this product. General risk policies may prove to be deeply inadequate to the task. The risks faced may be far greater than have been fully considered at this moment. We would expect this to change and quickly when the issue is considered more fully in the boardroom.

Insurance Nanotechnology

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