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While nanotechnology is a developing science that has great potential to improve the health of patients suffering from cancer and kidney disease, its impact on the health of the workers who would produce such medicines is far from certain.
The rising use of nanotechnology in medical and other consumer products has led to growing awareness of the potential workplace safety risks involved in the creation of products that utilize nanomaterials. While there is much uncertainty about the potential health effects, risk managers should take basic precautions to mitigate the risk of harmful exposure to nanomaterials, some of which can be borrowed from conventional safety programs.
While current insurance policies would cover nanotechnology risks, carriers are still trying to develop a concrete response for handling the exposure, including possibly excluding the risk, implementing sublimits or developing stand-alone policies.
Nanotechnology involves the manipulation of matter at nanometer length-one billionth of a meter-to produce new materials, structures and devices, according to the National Institute for Occupational Health and Safety in Washington.
Nanomaterials are used in an increasing number of products in sectors such as life sciences, electronics and cosmetics.
"Nanotechnology has spread across all spectrums and it will be used in all industries," said Louise Vallee, loss control services research and development specialist for Chubb Commercial Insurance in Whitehouse Station, N.J. "Every week there's some new development."
Altair Nanotechnologies Inc., for example, has been working with nanomaterials since 1999, creating products such as ceramics and car batteries for all-electric sports utility vehicles, said Roy Graham, senior vp of commercial development for Reno, Nevada-based Altair. The company has also developed nanomaterials for medicinal uses as part of an enhanced treatment for end-stage renal disease that is currently being evaluated by the U.S. Food and Drug Administration.
While the nanotechnology industry is growing rapidly, the potential health effects of nanomaterials that can be inhaled, ingested or penetrate the skin remain unclear. Certain studies have shown that changes in the chemical composition, structure of the molecules or surface properties of certain nanomaterials can influence their potential toxicity, according to NIOSH.
In a report called "Approaches to Safe Nanotechnology," NIOSH identified several workplace tasks that may increase the risk of exposure to nanoparticles, including working with nanomaterials in liquid form without adequate protection and performing maintenance on equipment used to produce nanomaterials.
The incorporation of good risk management practices can help minimize worker exposure to nanomaterials, the report stated. For example, the use of a well-designed exhaust ventilation system with a high-efficiency particulate air filter should effectively remove nanoparticles, the report said.
The list of guidelines provided by NIOSH, though, is incomplete as regulators are still working with private companies, trade associations and academics to develop a comprehensive set of best practices. Currently, there are no mandatory regulatory guidelines for the nanotechnology industry.
Altair has developed its own set of best practices for managing the nanotechnology exposure, including the use of personal protective clothing, HEPA filters and constant employee training and safety reviews. The company has not had any incidents where any individual working with nanomaterials has been injured or sickened, Mr. Graham said.
Companies can incorporate key elements of a traditional safety program into a nanotechnology-specific safety program, risk control specialists say. For example, respiratory protection and fire protection programs can be incorporated into a well-conceived nanotechnology safety plan.
"We believe that a lot of the technology that already exists for the bigger particles can be used for nanoparticles," Ms. Vallee said. "They may simply need some modification."
The level of awareness of the potential nanotechnology exposures in the risk management community varies from company to company, insurers say.
Chubb believes about 75% of companies actively handling nanomaterials are very aware of the potential workplace safety risks and best practices to mitigate those risks, Ms. Vallee said. Other companies still in the research and development phase may not be following best practices because of their size and the expense involved, but they need to plan how they will implement them before they go to production, she said.
Companies using the materials are best served by being proactive in addressing those exposures and communicating with their insurers about what they are doing to manage the risk, observers say. Altair's insurers have been impressed with the safety and diligence that takes place on the company's manufacturing floor and the company's insurance rates are no different from other chemical companies, Mr. Graham said. "We're not seeing any high insurance rates because we're a nanotechnology company," he said.
Guy Carpenter & Co. became aware of the need to study the nanotechnology risk issue during its fall 2004 renewals when a reinsurer tried to put a broad nanotechnology exclusion into one of its client's policies, said Harrison Oellrich, a New York-based managing director and head of the company's worldwide cyber, technology and intellectual property practice.
The company recently published a report titled "Nanotechnology: The Plastics of the 21st Century" that provided an overview on nanotechnology and the associated risks and implications for the insurance industry. The report predicted that insurance cover for nanotechnology would evolve in three stages, the first being an early study period, which is under way. The next phase will be a short "fear" phase frequently accentuated by unfounded but terrifying rumors about nanotechnology risks, the report predicted. In the last phase, coverage would be routinely provided either within conventional products or on a stand-alone basis.
Insurance policies do not contemplate nanotechnology risks, but they have not contemplated excluding them either, said Mr. Oellrich, one of the authors of the Guy Carpenter report. "By default, there is coverage," he said. "I think there's no question that there will be some (insurers) that will inevitably be fearful of this and (excluding the risk is) an approach they might want to take."
A measured approach in which insurers become familiar with the uses of nanotechnology and risk mitigation steps and then construct coverage that addresses the risk would be preferable than simply excluding the risks from insurance policies, Mr. Oellrich said.
The question of whether nanotechnology risks are covered is less relevant in the workers comp area because coverage is often prescribed by the states and the policies have little variation from insurer to insurer, said Toby Levy, director of standard lines products for Hartford Financial Services Group Inc.'s technology practice group in Hartford, Conn. "You either accept the risk or you don't accept the risk," he said. "It's not something we can say we want to exclude this risk from workers comp policies."
If the use of nanotechnology becomes as pervasive as some predict, insurers will need to develop a strategy for addressing the exposure because it will be difficult for them to exclude or isolate the risk in insurance policies, insurers say. "Risk avoidance from an insurance carriers' perspective is not a good long-term strategy," Mr. Levy said.