Prince Lobel Tye LLP,
Keywords: EHS, safety, nanotechnology, risk management
Summary:Commercial development of nanotechnology requires efficient and effective risk management strategies. The liability risks facing nanotechnology companies have already been recognized by the insurance industry. Early efforts at excluding such risks have been rejected by the market, and new insurance products aimed at businesses involved in nanotechnology have had limited impact, however nano risk is now on the radar of certain insurance underwriters. Recent developments in mass tort liability and the impact of prior mass tort liability events in other areas coupled with the commercial insurance industrys reaction to such developments, provide a basis for predicting the insurance industrys reaction to evolving nanotechnology risks under similar circumstances. The typical evolution under such circumstances includes no special treatment, no exclusions pre-mass tort events; rapid and near universal adoption by insurers of specific exclusions following mass tort events; and the eventual development of new specialty insurance products with limited and gradually expanding coverage at initially high and gradually moderating costs. Such developments could result in a sudden loss of commercial insurance markets for emerging nanotechnology risks and warrant vigilance and consideration of other risk management strategies, including contractual risk transfer to counterparties and alternative insurance strategies.