In the article, I stated that because insurance carriers viewed nanotechnology as potentially the next “asbestos” it would be difficult to insure and that nanotechnology business development would probably be forced to ‘creep at a snails pace”.

It turns out that, maybe, I was wrong. According to Lux Research, a consultant on emerging technologies, Nanotechnology business is expected to increase thirty fold.  It is expected to increase from $100 billion in 2007 to $2.6 trillion in 2014.  It is thought that, as much as 15% of all manufactured products will rely on some type of nanotechnology by 2014.

The interesting part of the from a product liability insurance point of view is how many insurance carriers are going to line up to provide product liability policies for nanotechnology businesses.  Ultimately, larger companies, such as DuPont and 3M, could either self-insure or bring enough premium to the table to attract some insurance carriers to provide product liability coverage.  However, with some claims already being filed with some sunscreen companies that use nano particles in their products, it is my opinion that most of the insurance carriers are going to wait before jumping in to provide product liability coverage for the new emerging nanotech products.  The insurance carriers are going to want a proven track record of no claims before making product liability insurance policies available to small and medium size companies.

The insurance companies’ primary concern is that since nanotech particles can be smaller than a virus and can easily penetrate or be absorbed by human tissue, they may be handling severity related claims such as cancer, similar to the thousands of past and pending asbestos claims.

One thing that is a sure thing – product liability trial lawyers are already having seminars in far away exotic locations and are preparing their strategies on how to hit a home run similar to the home run hit with asbestos.

A while back, we received a call from a company that had developed a spray on insulation using nanotechnology.  The company claimed it could dramatically reduce a company’s energy cost by using this spray on insulation. I cannot remember the exact statistics, but it was something dramatic, like one-eighth inch of nano insulation would replace twelve inches of normal insulation.

We took the application to the insurance marketplace and found no insurance carriers willing to provide a product liability policy.  We couldn’t understood because we reassured the product liability underwriters that the workers spraying the insulation on the pipes, etc. would be fully clothed in space suits that would not allow any nano particles to be inhaled by the workers. 

It was only after reading “Nanotechnology – Small matter, many unknowns” written by Swiss Re did I understand that the concern was not only for the workers, but that the nano particles could potentially be so small that they could attach to dust and later be inhaled by the public.  The insurance carriers are concerned that nano could be the next asbestos with regards to insurance claims.

Since there were obvious concerns by consumer advocates, insurance companies and others about the potential risks from nano materials the National Nanotechnology Initiative was set up to coordinate safety research.  However, based on the latest report from the National Research Council the NNI plan does not include research goals to help ensure that nanotechnologies are developed and used as safely as possible and fails to provide a clear understanding of nano risks and where it should be in 10 years.

The National Research Council has called for a new plan going beyond federal research to include universities, industry, consumer and environment research groups.

The potential for nanotechnology seems unlimited; however, until entrepreneurs and investors can be fully insured and know that their hard earned assets are protected, the business of nanotechnology will have no choice but to creep at a snale’s pace.  And until the product liability insurance carriers have reliable research data concerning the safety of nanotechnology, they will remain wary and cautious.