Tiny Technology Brings Big Multiline Exposures

"If anything, our report is a leading bell-ringer that says, 'Look, it's time for people to start thinking about this and start to put together some strategies," said Sandy Hauserman, senior vice president, worldwide environmental specialty practice leader, at Guy Carpenter & Co. Inc. He was referring to the international reinsurance intermediary's new report--"Nanotechnology: The Plastics of the 21st Century?"

The title implies that nanotechnology holds huge promise for businesses and the world in the near future, but the report also explores the technology's big question marks. Hauserman said that nanotechnology exposures could spread across multiple coverage lines, such as products, general and professional liability; workers' compensation; errors and omissions; environmental; and even property.

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Industries already engaged in the exploration of the beyond-microscopic products are confronted with a lot of questions, said Hauserman, when it comes to current regulation.

As the report explained, current regulations in the United States and the European Union fail to differentiate between normal-sized products and those at a nanoscale. Instruments used to detect toxins can't do so with nanoscale matter.

However, a window of opportunity is open today for insurers to work with governments to design new regulations.

"Because we know so little about the risks associated with this technology as an industry," said Hauserman, "we must be part of the discussion."

Nanotechnology is based on the scientific phenomenon that substances take on different qualities when they're broken down into the atomic and molecular size. Scientists can then manipulate these smallest of particles to create whole new materials, tools and devices.

Nanotechnology products are already used in as many as 30 consumer products, including sunscreen and air conditioners. By 2015, at least $1 trillion's worth of products using nanotechnology will be on the market, according to estimates from the National Science Foundation.

Guy Carpenter prepared the report in conjunction with Dr. Robert Blaunstein, national director of loss control for the American Safety Insurance Co.

October 1, 2006

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